How HCA officials siphoned cricket infra funds through fake purchases and manipulated contracts

Hyderabad: A massive corruption scandal has rocked the Hyderabad Cricket Association (HCA) after multiple FIRs and chargesheets revealed widespread misappropriation of funds, fraudulent tender processes and financial irregularities involving former office bearers and vendors.

The cases, spanning over a decade, highlight how funds meant for cricket infrastructure and development were siphoned off through manipulated contracts and fake purchases.

This development comes just days after the Telangana Crime Investigation Department (CID) arrested HCA president A Jagan Mohan Rao along with four others in connection with a Rs 2.3 crore fraud case.

ED officials stated that the CID’s recent FIR will be included in their ongoing investigation, which already covers earlier cases involving other senior HCA officials.

Stadium construction costs inflated

In the first FIR registered in April 2011, the Anti-Corruption Bureau (ACB) found that the construction cost of the Rajiv Gandhi International Cricket Stadium at Uppal was fraudulently enhanced.

Initially finalised at Rs 30.26 crore and awarded to Nagarjuna Construction Company Ltd, the project cost was later escalated to Rs 49.69 crore.

Investigators alleged that then vice-president N Shivlal Yadav, in collusion with consultants, manipulated project estimates and delayed completion timelines from nine months to seven years, causing a direct loss of Rs 6.18 crore to HCA.

Payments made without contract guarantees

In the second FIR filed in November 2014, the ACB unearthed irregularities in the construction of canopy works for the stadium’s north and south stands.

An advance payment of Rs 5 crore was made to Star Mercantile even before the contract was signed or bank guarantees obtained.

Contract terms were altered to benefit the contractor, leading to a loss of Rs. 91 lakh in liquidated damages, Rs 1.78 crore in advance payments made before work commenced and Rs 66.95 lakh due to unauthorised service tax charges.

The total loss from this transaction was pegged at Rs. 3.36 crore.

Arbitrary payments and criminal misappropriation

The third FIR, also from 2011, revealed several instances of criminal misappropriation of HCA funds.

These included an excess payment of Rs 1.74 lakh for parking lot works, unaccounted ticket sales worth Rs 12.01 lakh from the 2007 World Cup, excess land purchase payments of Rs 19.51 lakh in Mahbubnagar, and unaccounted advances for purchases such as dressing material.

Tender processes were bypassed, and works were awarded arbitrarily, causing significant losses to the association.

Recent FIRs reveal fresh irregularities

Based on complaints filed by HCA CEO Suneel Kante in October 2023, the Uppal Police registered three fresh FIRs following a forensic audit covering the period from 2020 to 2023. These audits revealed new layers of financial fraud under previous office bearers.

Cricket ball procurement scam

The first recent FIR named former president Mohammad Azharuddin, treasurer Surender Agarwal, and vendor Sara Sports for making payments worth over Rs 25 lakh without receiving the full supply of cricket balls.

Despite incomplete deliveries, repeat contracts were issued to the same vendor, and tenders were manipulated to block eligible vendors. The audit found significant price inflation compared to prevailing market rates, indicating deliberate fraud to siphon funds.

Inflated purchase of gym equipment

The second FIR highlighted irregularities in the procurement of gym equipment from Body Drench India. Although the vendor was defunct since 2020, the association placed an order worth Rs 1.74 crore, while a local vendor had quoted just Rs 17 lakh for similar equipment.

Advance payments exceeding Rs 1 crore were made despite no delivery within the stipulated 90 days, and the equipment arrived only after a year. Payments were cleared irregularly, suggesting clear collusion and malafide intentions by office bearers to cause financial loss to HCA.

Bucket chair purchase irregularities

The third FIR revealed that secretary R Vijayanand and Excellent Enterprises were involved in irregularities while procuring bucket chairs.

An order worth Rs 31 lakh for 1,100 chairs was issued with full advance payment without following tender norms. Only 700 chairs were delivered after nearly two years.

Subsequent purchases showed that similar chairs were available at significantly lower rates, indicating inflated prices that caused a direct loss of Rs 43 lakh to HCA. Further, invoices were undated and unsigned, violating GST rules and raising compliance concerns.

Systemic corruption under probe

These FIRs, chargesheets and forensic audit findings expose a pattern of systemic corruption within the Hyderabad Cricket Association.

Funds meant for infrastructure, stadium development and sports promotion were siphoned off through manipulated tenders, inflated contracts and fake purchases.

The Enforcement Directorate is now probing money laundering angles under the Prevention of Money Laundering Act (PMLA) to trace the final beneficiaries of the diverted funds.