September 2010
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Top PSUs withdraw Games sponsorship

In further embarrassment for organisers of the Commonwealth Games (CWG), the board of NTPC Ltd decided to sever all ties with the event. National Thermal Power Corporation, India’s largest power generation utility has also sought an audit by a government agency of the R20 crore it has already paid as sponsorship fees.

Another PSU, Power Grid Corporation of India (PGCIL), has also decided to withhold the R10 crore sponsorship it had promised.

NTPC, official power partner of the Games, is concerned that the negative publicity the Games have garnered following allegations of widespread graft will hurt its brand image.
Mint reported on August 6 that NTPC intended to drop the idea of using the event logo in all its correspondence for this reason.

The R20 crore already paid was part of a total Rs 50 crore commitment NTPC had made to the country’s biggest sporting event in 28 years.

“Our board met yesterday and we have decided not to give the remaining money to them,” said Chairman and Managing Director R.S. Sharma on Wednesday. “The Games logo stands dropped from all our communication. We need an audited account of the R20 crore we gave them to show us how the money was spent.”

The CWG organising committee had submitted a “written commitment” stating NTPC’s sponsorship amount will be utilised for the realisation of the bona fide objectives of the committee, but Sharma is unimpressed.

“They gave it in writing. That doesn’t meet anything. They will have to submit the audited accounts,” Sharma said.

PGCIL has also decided not to part with the Rs10 crore sponsorship fee it had promised. “We have refused to release any money for the Games,” Chairman and Managing Director S.K. Chaturvedi said.

NTPC had hoped to piggyback on CWG goodwill to open up fresh commercial opportunities in member countries by developing its brand internationally.

NTPC had signed an agreement with the CWG organising committee on December 10 last year, which entitled it to marketing, advertising and promotion rights for showcasing the company’s brand in India and overseas.

The sponsorship controversy relates to a contract that the organising committee had with Australia’s Sports Marketing and Management (SMAM), which allows it a commission, something not acceptable to the public sector companies.

As part of a damage-control exercise, the organising committee had cancelled the contract with SMAM. Other public sector sponsors of the event include Indian Railways, Central Bank of India and Air India.

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