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An audit into the finances of the Delhi and District Cricket Association (DDCA) is likely to punch holes in the defamation case filed by Union Finance Minister Arun Jaitley against Delhi Chief Minister Arvind Kejriwal.
The audit by a Delhi-based chartered accountancy firm, on the orders of Delhi High Court, has found ‘financial embezzlement’ to the tune of several crores in DDCA between 2012-2015.
Jaitley who was the DDCA president from 1999 to December 2013 has sued Kejriwal and five of his party colleagues of both civil and criminal defamation for Rs 10 crore. The Aam Aadmi Party (AAP) leaders had accused Jaitley of financial irregularities in DDCA. The case is pending in a trial court.
Financial Embezzlement
The court had, in February this year, asked the newly appointed DDCA administrator, Justice Vikramjit Sen, to call for an independent audit into the finances of DDCA for three financial years – 2012-13, 2013-14 and 2014-15.
The company finalised its report recently which was submitted to the court last week.
The report found embezzlement in the sale of match tickets, the absence of cash vouchers, unauthorised transfer of crores of rupees, bills paid without verification and multiple payments to vendors for same work at the Feroze Shah Kotla Stadium, owned by the DDCA.
The audit was ordered by the High Court while hearing a petition on illegal construction at the Kotla stadium without permission from the South Delhi Municipal Corporation. The court found that the DDCA had failed to submit a balance sheet of its finances from 2013 onwards to the Board of Control for Cricket in India.
The DDCA had also defaulted on entertainment tax from 2008 to 2012 and approached the Delhi government for a waiver. It was then that the Delhi High Court had appointed former Supreme Court judge, Vikramajit Sen, as DDCA administrator in January this year, asking him to opt for an independent audit of DDCA’s accounts.
Also Read: Bishan Bedi, Madan Lal, Kirti Azad Want Disaffiliation of the DDCA
A Shot in the Arm for AAP Leadership
AAP leaders, too, had alleged misappropriation of funds by the DDCA under Jaitley. They had also cited former Test cricketer-turned-BJP MP Kirti Azad’s similar allegations and called for probe.
Former Indian captain Bishan Singh Bedi, too had supported the demand in over 200 letters. Kejriwal had also accused the Centre of ‘searching’ for an inquiry report by the Delhi government into DDCA’s affairs, in the chief minister’s office, under the pretext of a CBI raid on the chief minister’s principal secretary, Rajendra Kumar.
The audit report has come as a shot in the arm for AAP leaders who are at the receiving end of Jaitley’s ire, who in turn claims that as non-executive chairman of DDCA, he was not involved in the day-to-day working of the cricket body.
The report found embezzlement in the purchase of tickets worth Rs 2.31 crore. DDCA purchased the tickets for ‘distribution to government officials’. It spent Rs 1.76 crore on purchase of tickets ‘on credit’. Yet another tranche of Rs 11.42 lakh was spent on purchase of tickets ‘through cheque’.
An ‘unauthorised’ amount of Rs 65.74 lakh was paid to staff for purchase of ticket, conveyance and lunch during the matches. Not just that, the surplus entertainment tax of Rs 2.78 crore was wasted because DDCA did not claim refund of unsold and surrendered tickets. The Association also lost Rs 83.05 lakh due to the mishandling of a property tax case.
Also Read: Jethmalani Calls Jaitley a “Crook” in DDCA Defamation Hearing
List of Dubious Transactions
The executive summary of the audit report claims that Rs 29 lakh was withdrawn for the purchase of tickets without entry into cash accounts and without the knowledge of the executive committee members.
Another Rs 15 lakh was withdrawn in two installments as cash for the purchase of tickets without the knowledge of executive committee members. There is no written account of these cash withdrawals, the report found.
Cash Vouchers and related bills/cash memos amounting to Rs 55 lakh are not available. Rs 18 lakh drawn on different dates for BCCI meeting, as mentioned in the voucher, though the cash withdrawn has been used for fictitious payment. Cash voucher/cash memos pertaining to cash payment of Rs 18 lakh are not available, suggesting that the said amount was embezzled.
In January 2014, DDCA issued unauthorised loan worth Rs 1.56 crore, to three private limited parties – Maple Infrareality Pvt Ltd, Shri Ram Tradecom Pvt Ltd and Vidhan Infrastructure Pvt Ltd. This was done to defraud the DDCA, the report notes.
It also found a dubious payment of Rs 7.70 lakh for the same work which was not done at all. Civil Engineer of DDCA, Ajay Kumar Chaurasia confirmed to auditors that he had no information about the work and payment of the bill had not been certified by him.
The auditors found an entry – which they termed likely fraud – where bills worth Rs 42.04 lakh were paid without certification by the Civil Engineer. Another ‘dubious payment’ of Rs 33.71 lakh, in two identical instalments, was made to a different company on single day for same work without any approval.
Auditors also detected ‘suspected transactions’ to different contractors, vendors and suppliers for Rs 2.84 lakh which were not verifiable besides unverifiable travelling expenses of the director worth Rs 4.28 lakh.
Rules Broken in Cash Transactions
DDCA’s callousness was evident in the non-recovery of debit balance worth Rs 18.6 lakh to four parties for a long time while they paid an excess service tax of Rs 8.44 lakh. Some chosen employees were paid ex-gratia bonus worth Rs 45.25 lakh.
The auditors found that huge advances had been made to various contractors without any written request in gross ‘violation of rules and regulations’. Besides, Rs 51 lakh was paid without service tax registration number and VAT registration number of the vendor, creating doubts over the genuineness of the bills.
Heavy cash was used for payment to the supplier, violating the income tax rules and regulations as well as executive instructions. It has been alleged that power was misused in awarding of contract to the supplier of eatables during matches without calling for tender, ensuring the quality of food and rate which the vendor will be charging. Other instances of oversight include hiring of a consultant without a memorandum of understanding and appointment letter defining the scope of work.
The DDCA wrote off claims of Rs 18.09 lakh without any justification and approval from the executive committee. Besides, auditors also found lack of internal control with regard to payment of bills, non-recovery of claim from GMR, non-compliance statutory laws, and without assuring the payment to consultancy firm thus, putting a question mark on professional competency. There also were instances of double payments and misuse of advance by employee and members.
(No reply was received to a questionnaire sent to finance minister Arun Jaitley’s office at the time of filing this report. This article will be updated as and when some response is received.)
(The writer is a Delhi-based senior journalist. He can be reached @sharadgupta1.)
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