6th December 2018

BWF Council official sanctioned with life ban for $1m Badminton fraud

The Ethics Panel of the Badminton World Federation (BWF) has sanctioned Raj Gaya with a life ban, after finding the former BWF Council member guilty of various corruption offences that defrauded badminton bodies of over US$1 million in funding. In its decision (PDF below), the Ethics Panel found that between June 2011 and June 2017, Gaya paid grants and funding received from the BCA and intended for the Mauritius Badminton Association (MBA) into his personal bank accounts, and used the money for his own benefit.

The Ethics Panel also found that Gaya claimed expenses from the BWF for sums that had not been spent or were less than had been spent; that he supported such expense claims by invoicing the BWF for services he had paid for from ‘Nitra’, an entity which the Panel found to be controlled by a co-Director in his Best Dairy Company Limited. A similar method involved SODNAC, an entity which the Panel found to be controlled by a shareholder in Best Dairy Company Limited.

The Ethics Panel also found that Gaya had forged accounting documents and records, and submitted them on behalf of the MBA and Badminton South Africa; and had forged a 23 March 2016 letter claiming that the Badminton Confederation of Africa (BCA) had authorised such payments to the MBA. It also found that Gaya had failed to cooperate with the BWF investigation, and had failed to produce documents when requested.

Gaya has held various positions in badminton, including with both the BCA and the MBA. ‘As holder of the post of BCA Secretary General, Mr Gaya was central to the planning, implementation and distribution of substantial funding allocated by the BWF to the BCA for the purpose of the development of Badminton in Africa’, reads the decision.

The decision mentions that Gaya was ‘ultimately responsible for the proper accounting of such monies. Specifically, from 2011 through to 2017, Mr Gaya held offices with both the MBA and the BCA. In this period the BCA received funding from the BWF.’ The intention was that once the BCA had allocated funding received from the BWF to the MBA, that funding would be used in specific areas. These included funding intended for the MBA to cover equipment; organisational grants; travel to international competition; for technical officials; the training of school teachers; and for players.

‘In 2014-5 Chipo Zumburani was appointed as Acting Treasurer and then Treasurer of the BCA’, reads the decision. ‘The BCA adopted a revised accounting policy to reconstruct its accounts for 2013, and it was through that process that the “unorthodox” system of money transfers was discovered. In doing so Zumburani found that the BCA had paid considerable sums to Mr Gaya personally, when that money had been intended for specific Badminton purposes in individual African countries and should have been paid to the relevant national association accordingly. 

‘Zumburani had examined the BCA records and calculated that between 2011 and 2017 a total of $1,098,906 was paid by the BCA to Mr Gaya’s personal bank account or accounts nominated by him; of that sum $154,039 was between 2011 and June 2017 intended for the MBA […] Between 2015 and December 2016, Mr Gaya sent to the BCA a series of 18 documents, bearing the signature of Rajen Pultoo as General Secretary of MBA, which purported to be receipts issued by the MBA to the BCA for monies that the BCA had sent to the MBA (collectively the “MBA Receipts”). The MBA Receipts were presented by Mr Gaya as accounting records for the purpose of demonstrating that the BCA has sent monies to the MBA, and that the MBA has received and used those monies for the purposes that the MBA Receipts were issued. 

‘Not one of the MBA Receipts appears to be a genuine document, not one of the MBA Receipts was in fact signed by Rajen Pultoo and his electronic signature had been added to them without his knowledge. In fact, each and all of the MBA Receipts had been created by Mr Gaya and the signature of Pultoo had been placed on the MBA Receipts by Mr Gaya. The total sum that the MBA Receipts purport to document is $158,509. In fact, in the period 2011 – 2017, the MBA never issued a receipt to the BCA.

‘The BCA also requested Mr Gaya to produce confirmation of monies that the BCA had sent to Badminton South Africa (“BSA”). Mr Gaya produced documents that the BSA had submitted receipts to the BCA on 2 July 2015, 11 July 2015 and 30 September 2015 for payments received by it. The language and style of those documents were very similar to the MBA Receipts and they purport to be signed by Herman Nagel, the BSA’s General Manager at the relevant time (now Chief Operating Officer). Herman Nagel has confirmed the documents were not sent by the BSA or signed by him. The BSA had an invoice system which allowed monies to be transferred directly to its bank account.’

In concluding, the Panel stated that there was a ‘lack of good governance’ at the MBA and BCA, especially regarding financial affairs. It also warned that ‘the accumulation of power in one individual within a sport in a particular region, i.e. Mr Gaya’s multi-functions in MBA, BCA and BWF, should have led to even more scrutiny and represents a lack of understanding of the key governance principle of conflict of interest’. It added that following the scandals that have played out at FIFA and the International Association of Athletics Federations (IAAF), there is ‘no excuse’ for this.

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