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NTPC severs ties with Games, seeks audit of sponsorship fees

NTPC severs ties with Games, seeks audit of sponsorship fees
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First Published: Thu, Aug 19 2010. 12 16 AM IST
Updated: Thu, Aug 19 2010. 12 16 AM IST
In what may further embarrass the organizers of the Commonwealth Games (CWG), the board of state-owned NTPC Ltd on Tuesday decided to sever all ties with the event. In addition, India’s largest power generation utility has sought an audit by a government agency of the Rs.20 crore it paid as sponsorship fees.
NTPC, the official power partner of the Games, is concerned that the negative publicity associated with allegations of widespread graft will hurt its brand image. Mint had reported on 6 August that the power utility plans to drop the use of the event logo in its communications for this reason.
The money it paid was part of a total Rs.50 crore commitment to the country’s biggest sporting event in 28 years.
“We have taken a call. Our board met yesterday and we have decided not to give the remaining money to them,” said chairman and managing director R.S. Sharma. “The games logo stands dropped from all our communication. We need an audited account of Rs.20 crore to show us how the money was spent.”
The CWG organizing committee has submitted a “written commitment” stating that NTPC’s sponsorship amount will be utilized for the realization of the bona fide objectives of the committee.
“They gave it in writing. That doesn’t meet anything. They will be required to submit the audited accounts of how Rs.20 crore was spent,” Sharma said.
NTPC had initially sought to piggyback on CWG goodwill to open up fresh commercial opportunities in member countries by developing its brand internationally.
It had signed an agreement with the organizing committee on 10 December, which entitled it to marketing, advertising and promotion rights to showcase the company’s brand in India and overseas.
In a communication—reviewed by Mint and dated 4 August—from A.K. Bhatnagar, NTPC general manager, human resources and corporate communication, to V.K. Saxena, additional director general, revenue, in the organizing committee, NTPC stated: “We are quite disturbed by the various reports appearing in the media about the alleged misutilization of the funds.”
Another state-owned firm, Power Grid Corp. of India Ltd (PGCIL), has also decided not to part with the Rs.10 crore sponsorship fee it had promised.
“We have refused to release any money for the Games,” chairman and managing director S.K. Chaturvedi said.
The sponsorship controversy relates to a contract that the organizing committee had with Australia’s Sports Marketing and Management (SMAM), which allows it a commission, something not acceptable to the public sector companies.
As part of a damage control exercise, the organizing committee had cancelled the contract with SMAM.
Other public sector sponsors of the event include Indian Railways, Central Bank of India and Air India.
utpal.b@livemint.com
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First Published: Thu, Aug 19 2010. 12 16 AM IST