Emaar-MGF under scanner, ED may summon Bhanot


New Delhi: The central government Wednesday continued its post-Commonwealth Games anti-corruption drive by confiscating the Rs.183-crore bank guarantee from Emaar-MGF, builders of the Games Village, while the Enforcement Directorate (ED) decided to summon senior officials of the Games Organising Committee.

Support TwoCircles

Emaar-MGF, however, denied that the bank guarantee was confiscated.

Action against Emaar-MGF came a day after the Delhi Development Authority (DDA) came out with findings of irregularities by the builder in the construction of the Village.

Emaar-MGF, denying that the bank guarantee was confiscated, said in a statement: “It is incorrectly being reported in the media that the bank guarantee has been confiscated. We have not received any notice for the encashment of the guarantee.”

It said that the guarantee had only been extended till Dec 31 at the behest of the DDA. According to the firm, the Games Village was built with the highest standards of quality and design.

According to a source in the urban development ministry, Rs.183-crore was provided by the builder as bank guarantee. The DDA will now take legal action against Emaar-MGF for the recovery of expenditure above the guarantee, the source added.

After union Urban Development Minister S. Jaipal Reddy asked for a report from the DDA Oct 7 on the issue, the housing agency submitted an interim report to the ministry that there were “irregularities” and “deficiencies” in the work done by the company, the source in the ministry said.

The 1,168 flats in the Games Village were constructed at a cost of over Rs.1,000 crore and the project was delayed. The work to maintain cleanliness in the Village continued even after athletes and delegates started arriving for the Games.

The run-up to the 12-day Commonwealth Games was marred by allegations by opposition parties and media reports about corruption in the Games’ organisation and delays in construction works.

Soon after the Games concluded Oct 14, Prime Minister Manmohan Singh appointed an inquiry panel headed by former comptroller and auditor general (CAG) V.K. Shunglu to probe the financial deals related to the Games.

Official sources Wednesday said the ED is likely to issue summons to OC secretary general Lalit Bhanot and other officials over alleged violation of foreign exchange regulations during the Queen’s Baton Relay in London.

Several dismissed OC officials, including former joint director general T.S. Darbari and former deputy director general Sanjay Mohindroo, will be summoned again, sources said. The two were questioned by the ED in August.

However, no decision has been taken so far to summon OC chairman Suresh Kalmadi, a Lok Sabha MP of the Congress, the sources added.

While search operations were Tuesday conducted on some 30 premises of firms and individuals who won contracts for the Games to probe possible tax evasion, revenue officials Wednesday said cases would be formally framed only in a year’s time.

“These kind of investigations take three-to-six months. This is what we anticipate in this case also,” a spokesperson of the Income Tax Department said, referring to the search operations in and around the national capital, as well as in Chandigarh and Ludhiana.

“The tax returns of these firms will come only next year around September. So only after that will our assessment reports be taken into consideration… One can say it will be a year-long process,” the spokesperson told IANS.

Among the various agencies conducting the probe are the Central Bureau of Investigation, the Directorate of Enforcement, the Directorate of Revenue Intelligence, the Central Vigilance Commission and the Comptroller and Auditor General of India.

Among those whose premises the tax sleuths visited was Bharatiya Janata Party’s Sudhanshu Mittal to look into the account books and related documents to probe possible irregularities in payment of taxes. His relatives had won some Games contracts.