The CBI registered a case of fraud and criminal conspiracy against suspended Prasar Bharti CEO B S Lalli and Chairman and Managing Director of Delhi-based Zoom Communications Wasim Dehlvi for alleged irregularities in broadcasting rights contract of Commonwealth Games which resulted in a loss of Rs 100 crore to exchequer.
Soon after registering the case, the CBI teams swooped down on the premises of Lalli and Dehlvi in the national capital and carried out detailed searches for about seven hours during which Lalli was extensively questioned by the investigating officials.
The agency has filed a case against Lalli and Dehlvi, who is also the resident director of UK-based SIS Live, under section 120-B and 420 of Indian Penal Code related to criminal conspiracy and fraud respectively. The agency has also charged the duo under the Prevention of Corruption Act.
The CBI alleged that a major portion of Rs 246 crore contract given to UK-based SIS Live by Prasar Bharti for "production and coverage" of Commonwealth Games was sub-contracted to Zoom Communications for only Rs 176 crore resulting in loss of nearly Rs 100 crore to the exchequer. "It is alleged that the then CEO of Prasar Bharti had extended undue favour to the UK-based company in the award and execution of the contract inspite of the objections from various quarters within Prasar Bharti," DIG and spokesperson Binita Thakur told reporters.
She said a number of conditions were relaxed in favour of the UK-based company including a provision pertaining to sub-contracting. "During the execution of the contract, the UK-based company was extended further favours by permitting payments despite of shortcomings in services and without proof of payment of service tax as well as by way of bearing cost for certain services, cost of which should have been borne by UK-based company resulting in loss to exchequer," she said.
The searches which started at 7.30 AM continued for nearly seven hours suring which a number of documents were seized by the officials, agency sources said.
In a statement, Zoom Communications said, "Earlier today, investigating authorities visited the Zoom Communications premises and have been speaking with our company officials."
"Zoom Communications was one of the subcontractors to SIS Live for CWG Delhi 2010. The use of subcontractors was expressly contemplated in the Prasar Bharati and SIS Live contract and therefore not illegal. The agreement between ZOOM Communications and SIS Live was purely commercial and transparent," it said.
The company said it is and will continue to provide all the required information and support to help with the investigation.
The CBI moves comes after Information and Broadcasting Ministry cleared the decks for prosecution of Lalli. However, sanction for the prosecution of former Doordarshan Director General Aruna Sharma for her role in the matter is yet to be given by the Ministry which said it is examining the reply given by the Madhya Pradesh cadre IAS officer.
Soon after getting clearance from the Prime Minister's Office to initiate action against both the officials on the basis of the recommendations of the V K Shunglu committee, the CBI had written to the Ministry seeking its nod to go ahead with criminal proceedings against them.
Prime Minister Manmohan Singh, after receiving the report, had directed that explanations be sought from Lalli and Sharma. Both Lalli and Sharma denied allegations of any wrongdoing. Sharma was ordered to be reverted back to the state cadre while Lalli was suspended. The Prime Minister decided to refer the matter to the CBI after considering the Shunglu committee report and the one given by Cabinet Secretary K M Chandrasekhar.
In its report, the Shunglu committee had fixed the responsibility for providing "undue benefit" to SIS-Live and Zoom Communications primarily on Lalli and Sharma and said they cannot be recused from the acts of omission and commission.