Monday, August 16, 2010

Top CWG Investors have Fake Addresses: Are They Living in a Slum

Talk about a meteoric rise. Jubilee Sports Technology (I) Pvt Limited was registered as a business venture of Siddharth Verma and Rohit Jain on September 6, 2006. Until March 2007, the company did absolutely no business, according to its annual return for the financial year 2006-07. But it has since pocketed a series of lucrative contracts, at exorbitant rates, to supply turf to Commonwealth Games venues.

Not bad going for a company whose promoter, Siddharth, is on trial as a conspirator in a corruption case involving his father, the late B P Verma, ex-chairman, Central Board of Excise and Customs.

First, a background on Jubilee. In 2008-09, Jubilee sold 2.24 lakh shares to two individuals and 12 companies at a premium of Rs 40 per share to 14 entities. Two individuals and 12 companies received these shares. For a privately held company that did no business till months prior to the share issue, this seems like an impressive premium.

Investigations by a leading English daily show that the 12 companies are registered at bogus addresses or at addresses where there are no traces of a company existing. Of the 12, eight claim to have directors who reside in the village of Karalla on the northern fringes of Delhi. It’s an unauthorized settlement of overflowing drains, temporary roads, narrow lanes and struggling families. Rain water stagnates for days, unwashed children and flies abound.

At least three companies that have taken a stake in Jubilee are headquartered at A-1168 Utsav Vihar, Karalla Village. Despite a three-hour hunt by TOI, and efforts by the local resident welfare association, the address couldn’t be located. In the village, blocks have plots only in the hundreds, residents point out. It may be a correct address, but in the chaos of Karalla it is as good as bogus. ‘‘We don’t have such rich people here,’’ says an elderly shopowner, when asked about the companies.

Of the remaining four companies, two Across Marketing and Nitya Sales are registered in the second floor of D-118 South Ganesh Nagar, in East Delhi’s Mandawali locality. When TOI reached the address, we were met by a middle-aged housewife who said she lived there and had never heard of them.

Seven of the 12 companies were registered post-2004 after Delhi bagged the Games. Four, in fact, were started in 2006 or 2007.

Unique Conbuild was registered two days after Jubilee itself was registered in September 2006. Magic Buildwell was registered three weeks after Jubilee was registered.

Now, back to Jubilee and the Commonwealth Games. Market sources say Jubilee’s contract for hockey surfaces, at $196 per square metre, is almost double the market rate. Its rate of Rs 1.35 crore per lawn bowls pitch is almost eight times the Rs 17 lakh that a British firm charged the National Games organizers in Ranchi just last year.