Embezzlement, Fraud, And Gross Mismanagement: What an External Audit of Just Three Years of the DDCA’s Books Reveals

By Sagar | 25 October 2017

This is the second part of a series on an external audit report that examines the books of the Delhi & District Cricket Association, between the years 2012 and 2015. The first part, on the report’s failure to mention Finance Minister Arun Jaitley, formerly the president of the DDCA, is here. The final part of the series, which discusses why, despite the audit’s findings and court orders, reform within the DDCA is a long way away, is here.

On 10 October, the Delhi & District Cricket Association (DDCA) submitted a special audit report of its accounts before the Delhi High Court. In January, the high court appointed the retired Supreme Court justice Vikramjit Sen as the administrator of the state-level cricketing body, and directed him to appoint an external auditor to examine association’s accounts. Sen engaged the firm GS Mathur & Company to audit the DDCA’s books for the financial years between 2012 and 2015.

The firm found numerous instances of financial and procedural malfeasance in the cricketing body’s functioning. The audit report explicitly names members of the DDCA’s executive body as being involved in these irregularities—prominent among these are SP Bansal and Anil Khanna. A former president and a former general secretary respectively, Bansal and Khanna were suspended from the DDCA in January 2015 on allegations of financial misconduct. In the first part of the series on the findings of this audit, I noted that the name of the finance minister, Arun Jaitley—who directly headed the DDCA for over half the time period between 2012 and 2015—was conspicuous by its absence from the report.

Though the audit covers a relatively short period of the cricketing body’s function, its findings are staggering. Among others, the report indicts the DDCA for: embezzlement in purchase of cricket-match tickets to the tune of Rs 231.82 lakh; withdrawing nearly Rs 18 lakh in the name of meetings for the Board of Control for Cricket in India (BCCI), which was subsequently used for “fictitious payments”; granting unauthorised loans of over Rs 155 lakh in January 2014 to three private companies, at least one of which was linked to the then DDCA president Bansal; granting “undue favor” to select employees in the form of nearly Rs 45.25 lakh in seemingly unauthorised ex-gratia payments and bonuses; and the payments of Rs 7.70 lakh that “seems to be bogus” and “appears to be embezzled.” The sum of the financial irregularities listed in the report adds up to over Rs 14 crore.

In one of the findings in a section titled “Cash fraud / embezzlement,” the auditors note that between 30 April and 8 June 2012, a sum of Rs 44 lakh was withdrawn and “used for purchase of IPL tickets.” (It is unclear why the DDCA, which is supposed to receive complimentary tickets from ticket-vendors such as GMR, would need to purchase extra tickets.) “There is nothing on record to justify necessity of purchasing tickets in cash,” the audit report states. “The source from where the tickets purchased were also not available / on record.”

The report explains further that this included a purchase of tickets worth Rs 15 lakh, the cash for which was “taken out of the cash available with the cashier,” allegedly “for Government Officials”—of which, tickets worth Rs 6.5 lakh were purchased with cash on 31 May 2012. “The name of the Officials for whom the tickets were purchased, and distribution of tickets to such officials and documentary evidence to support actual delivery of tickets to them is not on record,” the report states. Further, a sum of Rs 29 lakh was withdrawn via a cheque on 8 June that year, also for the purchase of tickets. The audit report states that Bansal authorised the first purchase, and that CK Bhardwaj, then the cashier of the organisation, encashed the second cheque, of Rs 29 lakh.

In 2012, the audit report notes, eight IPL matches were played at the Ferozshah Kotla stadium in Delhi. Of these, the last match was played on 17 May, between the Delhi Daredevils and the Royal Challengers Bangalore. “Hence, purchase of tickets in cash … does not coincide with the dates of match played in Delhi,” the audit states.

In addition to the complimentary tickets provided by GMR, the sponsor of the IPL, the report notes that in 2013 and 2014, Bansal also purchased tickets worth over Rs 75 lakh at a “discounted price” from the company. Further, Bansal issued a cheque from the DDCA account, for Rs 11.42 lakh, for the purchase of tickets. “No accounts” of these tickets were given by Bansal, the report said.

The report also notes that the company Bigtree Entertainment, which runs the ticketing website BookMyShow, delivered tickets worth nearly Rs 101 lakh for a one-day international match between India and West Indies, held in October 2014. It states, “The name of the persons and officials for whom the tickets were so purchased and distributed is not supported by any delivery documents of the tickets.”

The audit report is not the first instance in which the mismanagement of funds for IPL tickets has been revealed—earlier reports, such as an internal-fact finding report and a report by a committee constituted by the Delhi government, included similar findings. In a July 2016 piece for this publication, Kaushal Shroff noted that on 21 June that year, the DDCA’s executive body—which comprised Bansal, CK Khanna and Chetan Chauhan—passed a resolution finding itself “not-guilty” of the irregularities listed in the internal fact-finding report. This resolution stated that the allegations against Bansal with regard to the IPL tickets were “dropped in toto.”

In my first report, I noted that, according to the audit, despite having “no policy” of ex-gratia payments to employees, in October 2013, the DDCA approved payments amounting to Rs 45 lakh, to be paid to select employees. These included: Pankaj Bhardwaj, then the DDCA’s chief administrator; CK Bhardwaj, an administrator; Pritam Panwar, an accounts manager; and Ajai Kumar Chaurasia, a civil engineer. The firm’s report stated that the payments, from some of which no tax was deducted, were approved by Bansal, and that most of the amount was paid on the basis of a “request letter” by the beneficiaries. “The payment of ex-gratia on the proposal note of the beneficiaries only without any recommendation from any authority appears to have been prepared and sanctioned purposefully to defraud DDCA,” it added.

(Here, as in the case of the IPL-ticket purchases, the report confusingly refers to Bansal as the “then president.” However, as I noted in the first story, according to the minutes of a December 2013 meeting of the DDCA, Jaitley held the post of president at the time. He was succeeded by Bansal, who was elected his successor at this meeting. A Press Trust of India report, published a week before the 2013 election, quoting “reliable sources in DDCA,” noting that “Jaitley’s ‘blessings and good wishes’ are with Bansal, who enjoys the support of voters.”)

Other instances of irregularities mentioned in earlier reports, which are detailed in the audit report, include the alleged embezzlement of over Rs 1.5 crore, on suspicion of which Bansal and Khanna were later suspended. In January 2014, the audit report notes, the DDCA issued unauthorised loans to the tune of Rs 1.55 crore to three private companies: Rs 49.90 lakh to Maple Infrareality Pvt Ltd; Rs 53.50 lakh to Shri Ram Tradecom Pvt Ltd; and Rs 52.10 lakh to Vidhan Infrastructure Pvt Ltd.

“There was no work awarded to these parties that required any type of advance to them. There was also nothing on record for transfer of the amount as loan to these parties,” the audit report noted. “In the absence of any policy, practice and procedure followed … transfer of funds to these parties was not clear.” The audit report notes that Panwar, the accounts manager, wrote to the association’s internal auditor in 2014 that the money was transferred to the three companies “by issuing a … letter signed by the then President Shri S P Bansal and then General Secretary Shri Anil Khanna.”

According to the audit report, a balance sheet of Shri Ram Trade from March 2011 listed Bansal as a loanee. “These facts confirmed that Shri Saneh Prakash Bansal was having interest in Shri Ram Trade Com Pvt. Ltd. which he had not disclosed to the Executive Committee Members at any point of time,” it noted.

The audit report notes that though the companies later returned to the money to the DDCA, Bansal “misused his power in absence of rules and regulation … and put the Company at higher risk.” The audit report notes that the report of an earlier inquiry led by a sessions-court judge stated that Bansal’s action “cannot be justified and lends credence to the allegations of temporary embezzlement.” In a reply to the external auditors, dated 5 September 2017, Bansal, the report said, “is silent on all the above facts.”

The report enumerates various other irregularities. In two instances, it states, payments in the amounts of Rs 7.70 lakh and Rs 42.04 lakh were made allegedly for civil works. However, the report adds, Chaurasia, the DDCA’s civil engineer, did not have knowledge of the works, and had not certified the payments. Among the five companies that the audit report states received these payments is Shri Ram Tradecom Pvt Ltd—the company associated with Bansal. The report notes that the bills were “likely fraud” and that the “payment made is doubtful.”

Other instances of financial misconduct listed in the report include the hiring of what appear to be ghost companies: BRG Financial Services and VAAZ Consultancy Services were, according to the report, hired for the same job. Both were paid Rs 16.85 lakh, in October 2014. The auditors sent two chartered accountants to ascertain the addresses of the two companies. The CAs found that these companies did not exist. The bills for the two companies were approved by Bansal and Khanna, the report notes.

The audit report further states that DDCA officials—Bansal, the sports secretary Sunil Dev, and the joint secretary Ravi Jain—had claimed lakhs of rupees in refunds for traveling to meetings of the Board for Control of Cricket in India, allegedly held in 2013 and 2014. No other supporting documents such as the date or venue of these meetings, nor boarding passes for flights, were available, the audit report states. The payment of these claims, to the tune of Rs 4.28 lakh, the report adds, was “suspicious” and “should have been reimbursed by BCCI and not by DDCA.”

According to the report, the DDCA hired JS Bakshi, a member of the association, as a standing counsel between 2010 and 2012, without a legal appointment letter. There were irregularities in Bakshi’s payments as well—for instance, the audit states, Bakshi submitted two invoices for the same work, and “his authentic representation as counsel could also not be ascertained.” Bakshi’s son, the report notes, also represented the DDCA in some matters but “no document for his engagement as legal counsel … was found available.” According to the audit, Amitesh Bakshi was paid over Rs 1 crore between 2012 and 2015. Further, the audit report states, a legal counsel named Gautam Dutta claimed Rs 4.98 lakh for work on three cases in which the DDCA was neither a plaintiff nor a first respondent.

I attempted to contact Bansal, but my calls and message to him went unanswered. Earlier this month, I sent a detailed questionnaire to the finance minister, noting that several irregularities mentioned in the report took place when he appeared to be directly heading the DDCA. At the time that this story was published, I had not received a response.

According to Kirti Azad, the former cricketer and one of the first members of the DDCA to speak publicly about the alleged financial irregularities, the details contained in the audit indicate larger irregularities that are yet to be examined closely. Azad alleged that between 2008 and 2012, the financial irregularities and corruption the DDCA ran up to Rs 400 crore.  The former cricketer lodged a complaint with the Central Bureau of Investigation in late 2015, and has since written to the agency, urging it to register FIRs against those responsible for the malfeasance. “We are waiting for the CBI to expedite the case,” he said.

This is the second part of a series on an external audit report that examines the books of the Delhi & District Cricket Association, between the years 2012 and 2015. The first part, on the report’s failure to mention Finance Minister Arun Jaitley, formerly the president of the DDCA, is here. The final part of the series, which discusses why, despite the audit’s findings and court orders, reform within the DDCA is a long way away, is here.

Sagar is a web reporter at The Caravan.

READER'S COMMENTS

3 thoughts on “Embezzlement, Fraud, And Gross Mismanagement: What an External Audit of Just Three Years of the DDCA’s Books Reveals”

Nothing will happen to ck. Bansal and jotly as well. In India people who cheat they only prevail. Let me know who is playing for Ddca at moment. All boys come in the car. Poor boys don’t have pLace in each team even after ddca been looked after by high court. Clubs been soled. Most of club charging 25k to play league cricket in ddca.

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