IOA’s ‘Faulty’ Agreement With Reliance Resulted In Loss Of Rs 24 Crore: CAG Report

New Delhi: Reliance India Limited (RIL) got undue favour courtesy Indian Olympic Association’s (IOA’s) “faulty” sponsorship agreement which led to a loss of Rs 24 crore to the country’s Olympic body, according to a CAG audit report.

Under the terms of the agreement dated Aug 1, 2022, RIL has been granted the right to associate with IOA as Official Principal Partner of the Asian Games (2022, 2026), Commonwealth Games (2022, 2026), 2024 Paris Olympics and 2028 Los Angeles Olympics, Hindustan Times reported.

The agreement gave RIL rights to construct and showcase the ‘India House’ during these multi-disciplinary Games.

Through an amended agreement on December 5, 2023, additional rights of Winter Olympic Games (2026, 2030) and Youth Olympic Games (2026, 2030) were granted, as per the CAG report.

“In view of the above, the IOA did not watch their own interest as there was no change in consideration amount i.e. Rs 35 crore which was set in the Sponsorship Agreement signed on December 5, 2023 after giving the rights of four additional Games to RIL,” the audit report pointed out.

“The IOA should have raised the consideration amount from Rs 35 crore to Rs 59 crore as the consideration amount of rights of six Games was Rs 35 crore which was calculated on an average of Rs 6 crore per Games. Thus, there was loss of Rs 24 crore to IOA due to faulty agreement with RIL and undue favour to RIL. The reason for not enhancing the amount to Rs 59 crore may be intimated to audit,” the CAG report stated.

IOA president P T Usha has been asked to reply on the issue.

Defending the agreement, Ajay Kumar Narang, executive assistant to Usha, said it had to be renegotiated because of a ‘flaw’ in the tender.

“When the agreement was signed and naming rights were granted, it was in the name of sponsors — Reliance India House. In 2022, the International Olympic Committee allowed sponsors name with the country house. But in 2023 the IOC changed the conditions to say that the sponsor cannot use a name and it will have to be a country-named House,” Narang said.

“The sponsor came back to us saying they will not get the mileage, so they had to be compensated. So additional rights of four events were given. Also, CAG has calculated pro-rata per event which will be Rs 6 crore per Games. It is calculated on the visibility a sponsor gets. In Winter Olympics and Youth Olympics India’s participation is much less compared to Summer Olympics.”

Narang added, “In the agreement made in 2022 they should have specified that it would be subject to the conditions of naming as approved by the IOC. That was the flaw in the agreement and flaw in the tender itself.”

There are obviously differences within IOA as Sahdev Yadav, the treasurer, said that the executive council and sponsorship committee were not consulted when the agreement was amended.