DDCA suffered Rs 1.72 crore loss in FY 2018-19: Forensic audit report

The Delhi and District Cricket Association (DDCA) suffered a loss of Rs 1.72 crore in financial year 2018-19, a forensic audit report of the balance sheet has revealed. The DDCA’s total income was Rs 36.93 crores, but the books show that it spent Rs 38.66 crores.

The DDCA sustained this loss, as the forensic report indicates, largely due to a highly controversial contract worth Rs.6.25 crore (plus GST) awarded to a seemingly dubious joint venture for work at the historical Feroz Shah Kotla Stadium (now known as Arun Jaitley Stadium). The DDCA has already paid Rs 1.65 crore to the contractor even though the work remains incomplete, according to the report.

ACPL included: (i) Preparation of tender and contract documents in coordination with DDCA; (ii) Providing technical assistance in selection of contractor; (iii) Final inspection to certify completion of job.

DDCA received bids from four entities — Saifi Enterprises; Design Factory India (DFI); MSL Jangid JV (MSL); and The Design Consortium. Of these, Saifi Enterprises and The Design Consortium were disqualified on the grounds of technical/eligibility criteria. “No documents were available in file stating communication regarding reasons for disqualification of Saifi Enterprise and Design Consortium,” says the audit report.

Out of the remaining two bidders, MSL was the lowest bidder with a financial quote of Rs 6.64 crore, whereas DFI quoted Rs 7.33 crore. ACPL recommended to the DDCA to award the contract to MSL, and an agreement was signed. “The original tender was of Rs 6.64 crore, but after negotiations with MSL, it was reduced to Rs 6.25 crore plus GST,” a DDCA Apex Council member told IANS.

The auditors have tried to explore a “potential relationship between ACPL, MSL, and DFI” by visiting several places associated with these entities.

The forensic report cites two examples and mentions: “The authorised signatory of DFI tender documents was Vimal Rautella and the ACPL finance and admin list of people also mentions Vimal Rautella as a team member. As per information available in public domain, Sourabh Gupta is the managing director of both ACPL and DFI.”

According to the report, ACPL and MSL have common statutory auditor KM Agarwal & Co. of Daryaganj, Delhi. “Considering the above facts, one may conclude that ACPL, DFI and MSL are potentially related entities,” it says.

MSL’s address was given at H. No.540, Street No. 10, Sadarpur Colony, Sector 45, Noida. But the forensic audit report says “the registered address mentioned in the invoice was not traceable” on a visit to the locality on September 22, 2020. “The locality mentioned in the address was a residential area”.

The report, referring to the minutes of a DDCA Apex Council meeting on October 19, 2019, says that “as per MOM [minutes of meeting], the letter of award was required to be prepared by consultants ACPL and vetted by Sourabh Chadda, legal advisor and was to be signed by CFO”.

Within two months, the lawyer changed, notes the report. “As per MOM of Apex Council’s meeting dated December 5, 2019, it is was decided that legal contract papers shall be signed by Neeraj Sharma (Manager, Admin and Infra) once the same vetted by Gautam Dutta (Advocate),” it says.

While quoting minutes of Apex Council meeting on December 5, 2019, the report says the following DDCA officials were present in the meeting: Rakesh Bansal (vice-president) (chairman), Vinod Tihara (Secretary), Rajan Manchanda (Joint Secretary), Alok Mittal (Member), Apurv Jain (Member), Nitin Gupta (Member), Renu Khanna (Member), Sanjay Bhardwaj (Member), SN Sharma (Member), Gautam Dutta (advocate), and Kamal Sachdev (company secretary).

“The agreement dated December 10, 2019, entered between DDCA and MSL was signed by Neeraj Sharma,” notes the forensic report. It further makes some interesting remarks: “Documents related to vetting of agreement by Gautam Dutta, not available. Minutes of infrastructure committee meeting held, if any, for finalising tender document for the said contract and for appointment of MSL, not available.”

As per bank statement of DDCA, the association paid MSL Rs 1.65 crore (Rs 16,592,365) in four instalments between January 30 and February 27. “As per copy of cheques, the aforementioned cheques were signed by Alok Mittal and Sanjay Bhardwaj,a says the report.

Interestingly, the report says that as per books of accounts, on January 13, 2020, payment of Rs 33.81 lakh was recorded in the ledger of MSL vide cheque No.09854725, which was subsequently reversed on the same date. As per bank statement, there is no payment amounting Rs 33.81 lakhs. “Stop payment instruction was issued to bank pursuant to complaint filed by Sanjay Bhardwaj before honourable Ombudsman,” it says.

The DDCA apparently did not obtain approval from Archaeological Survey of India (ASI) before allotting construction work to MSL, and “ASI approval not made available”, says the audit report. The Feroz Shah Kotla Stadium is situated within 100 metres of Kotla Feroze Shah, an ASI protected monument, and therefore there are restrictions in construction around it.

Has the work been completed by MSL? “On field visit, [the] audit team observed some construction has taken place, but the work has not been completed,” says the report.

“This draft report is prepared to convey our findings in Phase I. These findings may be refined if any further information comes to the light during our assignment,” says the report.