Games OC may take Aussie firm to court over non-performance

Soon after the termination of its services,SMAM threatened to sue the OC. In a statement,SMAM accused the OC of “wrongfully,viciously,abruptly and publicly” terminating its services. Incidentally,SMAM is currently working for the Organising Committee of the London Olympics.

SMAM and the Organising Committee had discussed the issue last month,during which the former asked for Rs 60 crore in lieu of the expenditure on salaries and travel by its officials. “The claim is inflated. They were already reimbursed at every stage,and we owe then just around Rs 6 crore,” the official added.

SMAM was promised a commission of anywhere between 15 and 22.5 per cent on all sponsorship deals,including those struck with Indian public sector undertakings.

Chief Executive Officer of OC Jarnail Singh has written a letter to Mike Fennell,president of the Commonwealth Games Federation,asking it to “mediate” on the issue. The CGF is yet to respond to the request. “The parties have failed to reach a mutually acceptable solution. It is,therefore,requested that the president of the CGF initiate the mediation proceedings between the OC and SMAM,” Jarnail Singh wrote in the letter to the CGF president.

OC had signed a contract with SMAM,for negotiating and procuring sponsorships and licensing contracts,way back in 2007.

The red flag was first raised over the firm’s performance in February 2009 by Additional Director General (Revenue) V K Saksena. He had said in his note that SMAM has achieved “practically nil” results. He said that though SMAM claimed to have contacted 150 companies,nearly none of them came up to sponsor the event. Hero Honda,Coca-Cola and Reebok were the only private companies to do it,and most of the contributions were made by PSUs such as NTPC,Air India and Central Bank,which committed Rs 50 crore,Rs 50 crore and Rs 51 crore respectively. The biggest sponsor was Indian Railways at Rs 100 crore.