PT Usha threatens legal action on allegations over CAG report

Indian Olympic Association has refuted reports claiming that he body incurred a loss of Rs 24 crores due to alleged undue favours extended to sponsor Reliance Industries Limited (RIL). IOA President PT Usha has already provided a formal reply to the CAG’s half-margin No. 2. dated 12 September 2024, stating categorically that there has been no financial loss to the IOA, a press release by IOA stated.

Usha emphasized that the “issue stems from a flaw in the Request for Proposal (RFP) document issued in July 2022 by the previous IOA management.” Under this, the naming rights for establishing a National Olympic Committee (NOC) House were awarded to Ril as the highest bidder.

“A simple caveat stating that the naming rights were subject to the guidelines of the International Olympic Committee (IOC) and the Host Territory, issued from time to time should have been included in the RFP to safeguard the interests of all parties. Unfortunately, this clause was overlooked,” the release added.

In June 2023, the IOC published new guidelines disallowing sponsors from acquiring naming rights for NOC Houses at the Paris 2024 Olympic Games. Despite the IOA’s best efforts to secure exemptions, the IOC maintained its stance, which applied to all participating National Olympic Committees (NOCs).

As a result, RIL, having initially secured naming rights under the 2022 agreement, sought to renegotiate the terms with the IOA. RIL proposed a 50 per cent reduction in the previously agreed hosting fee due to the loss of naming rights.
The IOA further stated that under the circumstances,it had limited options

“1. Terminate the agreement entirely, resulting in no NOC House at the Paris 2024 Olympic Games and a loss of 21 crores (the balance of the rights fee receivable for the 2024 Olympic Games. 2026 Commonwealth.

2. Games, 2026 Asian Games and 2028 Olympic Games). 2. Accept the reduced rights fee of Rs. 17.5 crores for the remaining agreement period.

3. Renegotiate the terms to protect the IOA’s cash flow without compromising the original hosting fee of Rs. 35 crores for six events,” the release stated.

The IOA stated that under those circumstances, “it was the most obvious choice” to renegotiate the agreement and concurrently protect the original rights fee of Rs 35 crores. As part of this, additional events granted to RIL in the renegotiated agreement the 2026 and 2030 Winter Olympics and the 2026 and 2030 Youth Olympic Games-provide minimal visibility to sponsors compared to high-visibility events like the Summer Olympics.

Commonwealth Games, or Asian Games. Sponsorship value is primarily derived from how often a sponsor’s branding is visible on TV, live telecasts, print, or social media. The CAG’s report incorrectly equates the visibility of these events with the level of exposure available at the Summer Olympics. Commonwealth Games and Asian Games which is inaccurate.

“Usha strongly refuted the claims made by Sahdev Yadav in the CAG report, alleging that she acted without the knowledge of the IOA Executive Council,” the release added.

These claims, according to her, are part of a “deliberate attempt to tarnish her reputation and discredit the IOA”. In reality, the renegotiation proposal was circulated to all Executive Council members on 9 September 2023 and later forwarded by the Acting CEO in a letter dated 5 October 2023.

Rohit Rajpal, representing the Sponsorship Committee, was present at the meetings where the renegotiation was discussed.
The Addendum to the agreement was drafted under the guidance of one of India’s leading sports lawyers, Nandan Kamath of NK Law, Bangalore.

The Acting CEO was kept in the loop and copied on all relevant emails. Usha expressed her surprise that shortly after the revised agreement, the IOA’s Finance Committee and Treasurer decided to terminate Kamath’s services, despite his appointment as a legal advisor to the IOA by them in May 2023, the IOA release stated.

Usha concluded by reiterating that “all decisions taken were in the best Interest of the IOA and the Indian athletes”, ensuring that “no financial loss was incurred.”

“Any further attempts to mislead the public or undermine the IOA’s efforts will be met with appropriate legal action,” she added.

( Everything is same, except headline)

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