August 22, 2009 9:23:30 am
Two years ago,Suresh Kalmadi,president of the Indian Olympic Association (IOA),proudly said that he had sealed an agreement to bring the Formula One Grand Prix to India. Just months later,the company that signed the contract with the organisers had his son as part owner and a year later,his daughter and her husband joined it as directors.
In June 2007,Kalmadi as IOA chief announced that he had a letter of intent from F1 chief Bernie Ecclestone under which the IOA would promote and back the move to build infrastructure for the event in India and elicit support from Central and State Governments to construct the circuit.
In October that year,the UK-based Formula One Administration Limited F1s organisers signed a Rs 1600-crore contract with JPSK Sports Private Limited.
Records obtained by The Indian Express show that JPSKs stakeholders are Jaiprakash Associates (74%); Pune-based Sulba Realty Private Limited (13%) of which Kalmadis son,Sumeer Kalmadi,is Director; and Trackwork International Pvt Ltd,a Delhi-based firm (also 13%). SK in JPSK is an apparent reference to Sumeer Kalmadi.
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As per the agreement between the three signed on November 16,2007 JPSK acquired around 2,500 acres for the project. Approximately 1000 acres of this will be used for the race circuit and the balance land will be developed in the ratio of 80%-10%-10% between Jaiprakash Associates,Sulba and Trackwork.
Records from the Registrar of Companies,Ministry of Commerce,show that a year after the company was floated,Kalmadis daughter,Payal Aditya Bhartia,and his son-in-law,Aditya Bhartia,joined JPSK as Independent Directors. Officials of the Jaypee Group say they regularly attend Board meetings.
While Sumeer Kalmadi did not take calls,Suresh Kalmadi,contacted by The Indian Express,said: The IOA is not involved now since we could not arrange funds for the event. As for the involvement of my family members in the new company formed,I will explain everything on my return (hes on an overseas tour).
Kalmadi is also chairman of the organising committee for the 2010 Commonwealth Games in Delhi.
Randhir Singh,IOA Secretary General,confirmed that some complaints have reached the IOA. These are being verified. When the announcement was made,all top IOA officials were present. Now we are not sure where things stand.
When contatced,Manoj Gaur,executive chairman of the Jaypee Group,said: It was Sunder Mulchandani (of Trackwork) who introduced us to F1s Bernie Ecclestone. He was also the one who asked us to involve the third partner (Sumeer Kalmadi.) The project is a prestigious one and we have already invested Rs 700 crore of the estimated Rs 1600 crore. The 2,500 acres is eventually going to cost us about Rs 1 crore each acre.
JPSKs investment so far,Gaur said,includes payment for land and annual instalments of $40 million over a 10-year period. All rights,including advertising and TV rights,remain with the foreign promoters of the event. We will only earn from ticket sales but we will have created a sporting infrastructure for the country which no other private company has done.
Gaur claimed that since acquisition of land in Greater Noida was delayed until September 2008 (land was allotted as a SEZ project by the Uttar Pradesh Government),the 2007 agreement,as per a clause in it,technically stands annulled. However,records with the Registrar of Companies as of April 2009 show that Sumeer Kalmadis and Mulchandanis shareholding remain intact.
Mulchandani underlines that the original arrangement remains in place: Everything is on course for the race to be held in 2011. We are expecting Bernie Ecclestone to visit India sometime later this year.
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