The DDCA sustained this loss, as the forensic report indicates, largely due to a highly controversial contract worth Rs.6.25 crore (plus GST) awarded to a seemingly dubious joint venture for work at the historical Feroz Shah Kotla Stadium (now known as Arun Jaitley Stadium). The DDCA has already paid Rs 1.65 crore to the contractor even though the work remains incomplete, according to the report.

 

Previous DDCA Ombudsman Justice Deepak Verma had commissioned the forensic audit to ASA & Associates in August. The tentative draft forensic audit report contains the findings of the first phase. The report on the second phase will come later.

 

Interestingly, ASA & Associates were DDCA's internal auditor when the company was assigned the task of the forensic audit, but it resigned in September. "The task being allotted to ASA & Associates was wrong in itself as it was a clear cut case of conflict of interest. They resigned after completing the audit," said a DDCA Apex Council member.

 

In another dramatic development since the allotment of the forensic audit, the DDCA replaced Ombudsman Deepak Verma with Badar Durrez Ahmed, also a retired Chief Justice of Jammu and Kashmir High Court who was replaced by Verma.

 

In October 2017, too, a special audit of financial years 2012-13, 2013-14 and 2014-15, was ordered by then Administrator Vikramajit Sen, a former Supreme Court judge, and that had unearthed financial irregularities running into crores of rupees. GS Mathur & Co. of New Delhi had done the audit. However, no individual was penalised for being involved in financial transgressions at the time. And all are likely to go scot-free now as well.

 

Interestingly, the present forensic audit report comes just a few days before elections for the posts of president, treasurer, and four directors of the DDCA are to take place between October 17 and 20.

 

In December last year, the DDCA had awarded the contract for "work related to interior/execution/modernisation work of restaurant, bar, member's lounge, a dedicated cricket library, and other facilities at the Willingdon Pavilion, and in New Club House building" at the Kotla Stadium.

 

The contract is caught up in a maze of cross connections, both within the DDCA as well as the firm that won the bid -- a contentious joint venture between Jangid Interior & Decor Pvt Ltd. and Mobility Solution Ltd. (MSL) -- among the four entities that had bid.

 

Broadly, the Ombudsman had commissioned a forensic report in two phases: Phase I -- Review of specific transactions with MSL; and Phase II -- Review of previous two years' transactions of DDCA (FY 2018-19 and 2019-20). The second report is yet to come.

 

As per the partnership deed of MSL, it is a joint venture between ‘Mobility Solutions Limited' and ‘Jangid Interior Decor Pvt. Ltd.'. The contract was awarded on December 10, 2019, according to the audit report.

 

DDCA had initially appointed Archohm Consults Pvt. Ltd. (ACPL), as per an agreement dated September 5, 2019, as consultant for the "designing of the restaurant, bar, member's lounge, dedicated cricket library and other facilities (including relocation of office space) at the Willingdon pavilion of DDCA".

 

Scope of work of ACPL included: (i) Preparation of tender and contract documents in coordination with DDCA; (ii) Providing technical assistance in selection of contractor; (iii) Final inspection to certify completion of job.

 

DDCA received bids from four entities -- Saifi Enterprises; Design Factory India (DFI); MSL Jangid JV (MSL); and The Design Consortium. Of these, Saifi Enterprises and The Design Consortium were disqualified on the grounds of technical/eligibility criteria. "No documents were available in file stating communication regarding reasons for disqualification of Saifi Enterprise and Design Consortium," says the audit report.

 

Out of the remaining two bidders, MSL was the lowest bidder with a financial quote of Rs 6.64 crore, whereas DFI quoted Rs 7.33 crore. ACPL recommended to the DDCA to award the contract to MSL, and an agreement was signed. "The original tender was of Rs 6.64 crore, but after negotiations with MSL, it was reduced to Rs 6.25 crore plus GST," a DDCA Apex Council member told IANS.

 

The auditors have tried to explore a "potential relationship between ACPL, MSL, and DFI" by visiting several places associated with these entities.

 

The forensic report cites two examples and mentions: "The authorised signatory of DFI tender documents was Vimal Rautella and the ACPL finance and admin list of people also mentions Vimal Rautella as a team member. As per information available in public domain, Sourabh Gupta is the managing director of both ACPL and DFI."

 

According to the report, ACPL and MSL have common statutory auditor KM Agarwal & Co. of Daryaganj, Delhi. "Considering the above facts, one may conclude that ACPL, DFI and MSL are potentially related entities," it says.

 

MSL's address was given at H. No.540, Street No. 10, Sadarpur Colony, Sector 45, Noida. But the forensic audit report says "the registered address mentioned in the invoice was not traceable" on a visit to the locality on September 22, 2020. "The locality mentioned in the address was a residential area".

 

The report, referring to the minutes of a DDCA Apex Council meeting on October 19, 2019, says that "as per MOM [minutes of meeting], the letter of award was required to be prepared by consultants ACPL and vetted by Sourabh Chadda, legal advisor and was to be signed by CFO".

 

Within two months, the lawyer changed, notes the report. "As per MOM of Apex Council's meeting dated December 5, 2019, it is was decided that legal contract papers shall be signed by Neeraj Sharma (Manager, Admin and Infra) once the same vetted by Gautam Dutta (Advocate)," it says.

 

While quoting minutes of Apex Council meeting on December 5, 2019, the report says the following DDCA officials were present in the meeting: Rakesh Bansal (vice-president) (chairman), Vinod Tihara (Secretary), Rajan Manchanda (Joint Secretary), Alok Mittal (Member), Apurv Jain (Member), Nitin Gupta (Member), Renu Khanna (Member), Sanjay Bhardwaj (Member), SN Sharma (Member), Gautam Dutta (advocate), and Kamal Sachdev (company secretary).

 

"The agreement dated December 10, 2019, entered between DDCA and MSL was signed by Neeraj Sharma," notes the forensic report. It further makes some interesting remarks: "Documents related to vetting of agreement by Gautam Dutta, not available. Minutes of infrastructure committee meeting held, if any, for finalising tender document for the said contract and for appointment of MSL, not available."

 

As per bank statement of DDCA, the association paid MSL Rs 1.65 crore (Rs 16,592,365) in four instalments between January 30 and February 27. "As per copy of cheques, the aforementioned cheques were signed by Alok Mittal and Sanjay Bhardwaj,a says the report.

 

Interestingly, the report says that as per books of accounts, on January 13, 2020, payment of Rs 33.81 lakh was recorded in the ledger of MSL vide cheque No.09854725, which was subsequently reversed on the same date. As per bank statement, there is no payment amounting Rs 33.81 lakhs. "Stop payment instruction was issued to bank pursuant to complaint filed by Sanjay Bhardwaj before honourable Ombudsman," it says.

 

The DDCA apparently did not obtain approval from Archaeological Survey of India (ASI) before allotting construction work to MSL, and "ASI approval not made available", says the audit report. The Feroz Shah Kotla Stadium is situated within 100 metres of Kotla Feroze Shah, an ASI protected monument, and therefore there are restrictions in construction around it.

 

Has the work been completed by MSL? "On field visit, [the] audit team observed some construction has taken place, but the work has not been completed," says the report.

 

"This draft report is prepared to convey our findings in Phase I. These findings may be refined if any further information comes to the light during our assignment," says the report.