On 12th September, the Comptroller and Auditor General of India (CAG) released an audit report suggesting that the “faulty” sponsorship agreement between the Indian Olympic Association (IOA) and Reliance Industries Limited (RIL) resulted in undue benefits to RIL. The CAG alleged that the agreement led to a loss of Rs 24 crore to the IOA.
However, the amendments that led to the so-called loss were made after the International Olympic Committee (IOC) changed conditions and withdrew the decision to allow the sponsor’s name to appear with the country house.
CAG alleged a loss of Rs 24 crore
As per the report published in the Hindustan Times, RIL was granted the right to associate with the IOA as the Official Principal Partner of the Asian Games (2022, 2026), Commonwealth Games (2022, 2026), 2024 Paris Olympics, and 2028 Los Angeles Olympics in 2022. It also gave RIL the rights to construct and showcase the ‘India House’ during these Games.
Initially, the agreement was for six Games. However, through an amendment on 5th December 2023, additional rights for the Winter Olympic Games (2026, 2030) and Youth Olympic Games (2026, 2030) were also granted to RIL without additional fees.
The report noted, “In view of the above, the IOA did not protect their own interests as there was no change in the consideration amount, i.e. Rs 35 crore, which was set in the Sponsorship Agreement signed on 5th December 2023 after granting the rights to four additional Games to RIL.” It further added, “The IOA should have raised the consideration amount from Rs 35 crore to Rs 59 crore as the consideration amount for the rights to six Games was Rs 35 crore, calculated on an average of Rs 6 crore per Game. Thus, there was a loss of Rs 24 crore to the IOA due to the faulty agreement with RIL and undue favour to RIL. The reason for not increasing the amount to Rs 59 crore should be communicated to the audit.”
IOA treasurer and president of the Weightlifting Federation of India, Sahdev Yadav, claimed that the executive council and the sponsorship committee were not consulted before amending the agreement. He said that RIL benefitted from the amendment, and it was not within the knowledge of the executive board, finance committee, or sponsorship committee. Seeking a response from IOA president PT Usha, he said, “The president should explain why the agreement was changed and who signed it. It has led to a loss of Rs 24 crore to the IOA. This should not have happened.”
Change in IOC conditions led to the addition of four Games to the agreement
Though the CAG has alleged that the IOA faced a loss of Rs 24 crore, a crucial detail must be noted to understand the reason for the amendment to the agreement in December 2023. The executive assistant to IOA president Usha, Ajay Kumar Narang, explained why the agreement was renegotiated in the first place. He said, “When the agreement was signed and naming rights were granted, it was in the name of the sponsor — Reliance India House. In 2022, the International Olympic Committee allowed the sponsor’s name with the country house. But in 2023, the IOC changed the conditions to say that the sponsor cannot use a name, and it will have to be a country-named house.”
Crucial detail missing in CAG’s ‘estimate’
After the IOC changed the conditions, the sponsor, in this case, RIL, told the IOA that it deserved to be compensated as it would not gain any mileage and will lose on advertisement opportunities if their name doesn’t get added. Narang added, “The sponsor came back to us saying they would not gain the mileage, so they had to be compensated. Therefore, additional rights for four events were given. Also, the CAG has calculated the pro-rata per event, which amounts to Rs 6 crore per Game. It is calculated based on the visibility a sponsor gets. In the Winter Olympics and Youth Olympics, India’s participation is much lower compared to the Summer Olympics.”
He said, “In the agreement made in 2022, they should have specified that it would be subject to the naming conditions approved by the IOC. That was the flaw in the agreement and the flaw in the tender itself.”
Additionally, the CAG’s estimation of te potential loss is based on a pro-rata basis, assigning Rs 6 crores per game. But there is an issue because the summer Olympics are much more highlighted, and India sends a much bigger contingent there than the winter Olympics.
