Corruptions hinders Indian Grand Prix

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Corruption allegations threaten Indian Grand Prix

It seems not everything is running smoothly as India prepares to host its inaugural Grand Prix in October.

Last week, it emerged that former Bahrain Grand Prix executive Mark Hughes - the F1 boss of the race promoter Jaypee - had quit for "personal reasons" and switched to the Abu Dhabi project. Mark Hughes has been replaced by Azhar Ghazili, a former Malaysian Grand Prix executive.

Suresh Kalmadi, the politician and sports administrator who initiated the nation's F1 project who was incharge of original race promoter, president of the Indian Olympic Association and formerly chairman of the Commonwealth Games Organising Committee has departed the fray under suspicion of corruption, accused of hindering an inquiry being conducted by the country’s Central Bureau of Investigation.

Under scrutiny is purported misconduct regarding the recent Commonwealth Games in Delhi last October, with Kalmadi’s role in the affair said to have involved the channelling of illegal profits through current grand prix promoter JPSK, allegedly an acronym of Jaypee and the initials of Kalmadi’s son Sumeer, part-owner of the organisation.

Kalmadi was a prime mover of the F1 project two years ago when he secured a preliminary agreement between the IOA and Bernie Ecclestone to bring Grand Prix racing to the nation. When the IOA failed to get government funding for the venture, a new company, JPSK Sports, was incorporated in November 2007 to serve as the race promoter and subsequently signed a 10-year contract with Ecclestone's Formula One group.

JPSK was created by three entities. The majority shareholder, with 74 percent of the stock, was Jaiprakash Associates, a company set up by the Jaypee Group. This massive construction and engineering conglomerate, founded in 1979 by Jaiprakash Gaur, is building the new F1 circuit and infrastructure in Delhi. There also were two minority shareholders, each holding 13 percent. They were Trackwork International, a Delhi company whose principal, Sunder Mulchandani, originally came up with the idea for the F1 project; and Sulba Realty, a company in Pune that is directed by Kalmadi's son, Sumeer Kalmadi, whose initials are in the name of the event promoter. In 2008, JPSK appointed Sumeer Kalmadi's sister and her husband, Payal, as well as Aditya Bhartia, to its board of directors.

The 2011 Indian Grand Prix is due to be held over the weekend of 28-30 October around the new Jaypee Group Circuit that is being built in Greater Noida, 50km from Delhi.