TNN | May 19, 2011, 04.16am IST

http://timesofindia.indiatimes.com/india/ED-charges-Kalmadi-with-money-laundering/articleshow/8429662.cms

NEW DELHI: Enforcement Directorate has slapped money laundering charges on sacked Commonwealth Games organising committee chief Suresh Kalmadi and has begun identifying his properties and those belonging to his relatives and aides to attach them to recover losses from Games contracts.

Charges under Prevention of Money Laundering Act (PMLA) were slapped on Kalmadi for alleged corruption in awarding of key Games contracts. A notice will be issued to him to appear for questioning in the next few days. The charges are based on the FIR filed by CBI which also formed the basis for his arrest.

According to CBI, Kalmadi was part of the conspiracy in favouring Swiss Timing Omega for a Games contract, besides his involvement in several other deals.

Last month, ED had asked Kalmadi to provide all his travel details and bank transactions for the entire period of his stay with the OC. The agency had also carried out enquiries from banks and financial institutions in the country and abroad to trail Games-related transactions.

The OC had favoured appointment of certain vendors for the Games. It was later found by the Comptroller and Auditor General that the difference in rates charged by these vendors for items with the same specification varied between 5% and 99%. Had the vendors adopted the minimum rate across clusters, the OC could have saved at least Rs 220 crore, CAG had observed in its preliminary findings.

The audit had found that in many cases, the rental rate of items was higher than their actual purchase cost, even to the extent of 185%. The excess expenditure would be much higher if the value of items that was disclosed to Customs authorities by the vendors was taken into account.

Kalmadi's aides at OC allegedly introduced restrictive clauses to keep competition out of the bidding process. Though two of the vendors finally selected did not meet the required turnover eligibility of Rs 1,075 crore, they were selected at the instance of V K Verma, one of the directors-general of the Games.