Kasaragod: The state government should either keep Udma MLA C H Kunhambu or put on hold the second edition of Bekal International Beach Fest as the maiden event is being investigated by the Vigilance and Anti-Corruption Bureau (VACB) for large-scale fudging of ticket numbers and financial irregularities, said the Youth Congress.
Around Rs 3 crore is missing from the sale of tickets alone, said Youth Congress district president B P Pradeep Kumar. The money raised from businesses and individuals to organise the event also does not figure in the balance sheet, he said.
Even eight months after the event, the organisers, led by Udma MLA and CPM's state committee member C H Kunhambu, have not paid the Goods and Services Tax (GST) of Rs 39 lakh to the government, he said. "The MLA profiteered from the corruption in the inaugural fest and has now started work on the second beach fest hoping to make a killing again," he alleged.
Kunhambu convened a meeting of all stakeholders on Thursday, September 21, to form an organising committee for the second edition of the Bekal International Beach Fest.
"The Collector and other government agencies should withdraw from the meeting. The MLA cannot be allowed to head the committee again," said Pradeep Kumar. "Else, the Youth Congress would launch strong agitations against the event," he said.
The Bekal International Beach Fest, a year-ender event, was the government's idea to promote Kasaragod as a tourism destination. The Department of Tourism pitched in Rs 10 lakh as seed money and partnered with Bekal Resorts Development Corporation (BRDC), District Tourism Promotion Council (DTPC), Kudumbashree, and local self-government bodies to organise the event. The 10-day fest from December 24, 2022, to January 2, 2023, was steered by an organising committee led by Udma MLA Kunhambu.
Beach fest, a runaway hit, but the balance sheet is blank
The Bekal International Beach Fest, held at Pallikkara beach, was a chock-a-block, with around 10 lakh people thronging the venue in the 10 days, said the organisers. The numbers could be an understatement because New Year's Eve and New Year's Day itself saw five lakh visitors, an official of BRDC, the event coordinator, told Onmanorama.
The fest hosted hundreds of artistes, commercial stalls, and food court, and ticketed amusement rides. Music concerts and entertainment shows ensured crowds stayed back till midnight. The roads leading to the Pallikkara beach park had traffic jams for hours every night. Yet, none of these reflected on the balance sheet made public by the organisers after the event.
Pradeep Kumar filed a complaint with the Vigilance and Anti-Corruption Bureau listing out the financial discrepancies. "The Vigilance officers called me and took my detailed statement. They have submitted their preliminary report to the director and the investigation is on. The government cannot go ahead with the event as if nothing had happened," he said.
The stink in the fest
After the fest, the organisers said that they sold only 4 lakh tickets, priced at Rs 50 each. After paying out the commission, they got Rs 1.42 crore from the sale of tickets.
This is a gross understatement. On December 29, the sixth day of the fest, the organisers called a press conference at the venue and told reporters that 4 lakh people saw the event from December 24 to 28. "The organisers are making an incredible claim that they did not sell any tickets for the rest of the five days," said Pradeep Kumar.
A BRDC official said five lakh people attended the event on New Year's Eve and New Year's Day.
Ahead of the Bekal Beach Fest, Kunhambu held a press conference and told reporters that 2.5 lakh tickets were pre-sold through Kudumbashree units. Through that, the organisers raised around Rs 1.25 crore, minus the commission.
But what does the balance sheet say? Soon after the fest, the organisers released a provisional figure saying it got Rs 1.79 crore as income, and had an expense of Rs 1.44 crore, leaving a balance of Rs 35 lakh.
But on January 25, the organisers released the final financial statement. It said it had an income of Rs 1.88 crore and an expense of Rs 1.74 crore, leaving a balance of Rs 13.54 lakh.
"But the statement did not mention about the Rs 10 lakh the organisers got from Bank of Baroda or the Rs 10 lakh from City Gold jewellers in Kasaragod," said Pradeep. The organisers had also gone to the Middle East in December to raise money for the fest, he said. "That money is also not mentioned in the statement," he said.
Of the Rs 1.88 crore income, the organisers said it got Rs 1.42 crore from the sales of 4 lakh tickets.
Kudumbashree's Yatra Shree sold tickets worth Rs 84.49 lakh, Kerala State Youth Welfare Board sold tickets worth Rs 13.78 lakh, Pallikkara Service Cooperative Bank sold tickets worth Rs 29 lakh, without taking a commission, and Team Kerala sold tickets worth Rs 15.57 lakh; that comes to a total of Rs 1.42 crore.
"Majority of the tickets were sold over the counters at the venue. The financial statement has no mention of it," Pradeep said.
When contacted, the BRDC official explained the discrepancy by saying that a lot of people entered the venue without buying tickets.
Onmanorama visited the festival venue for four days, including New Year's Eve and New Year's Day, entry points were manned by private security guards and volunteers were selling tickets on the roads leading to the venue.
8 lakh tickets printed for Rs 7.67 lakh!
Though the organisers officially sold only 4 lakh tickets, they printed 8 lakh tickets, according to the financial statement.
The statement also said that the 8 lakh tickets were printed at a cost of Rs 7.67 lakh, or nearly Re 1 for one ticket. "This is flagrant swindling," said Pradeep Kumar.
He said he spoke to several printing press owners and they said the cost would not exceed Rs 3.5 lakh. "The organisers claimed more than double the market rate for printing tickets. And there is no transparency on how the printing press was selected," he said.
Panchayat felt short-changed
The CPM-controlled Palikkara grama panchayat, the host panchayat, pitched in Rs 1 lakh from its 'own fund' to help organise the event. The panchayat deployed its resources, including the members and staff, for two months to make the event a success. "But we got nothing in return," said Sidhik Pallipuzha, a panchayat member from IUML.
After the introduction of the Goods and Services Tax, panchayats cannot claim entertainment tax.
Panchayat president M Kumaran of the CPM then introduced a resolution in the board meeting seeking 25 per cent of the profit from the event. The resolution was passed unanimously and sent to the government. "The work on the next event is starting but we are yet to hear from the government," said Sidhik.
GST Department stakes claim for Rs 39
The GST Department has sent a notice to BRDC, the festival coordinator, seeking Rs 39 lakh (18 per cent) as taxes on the sale of tickets. BRDC has yet to pay the taxes.
When contacted, MLA Kunhambu said that around 20 beach festivals were organised in Kerala last, and yet the GST Department served notice for tax only on Bekal Fest. "The BRDC has raised an objection with the department. We will comply with the order," he said. He rubbished the other charges of corruption as "mere allegations".
The BRDC official quoted above said that the organisers did not know they had to pay GST. "GST has to be paid only if the ticket collection crosses Rs 20 lakh. We were not expecting such sales and so did not collect tax while selling tickets," he said.
To be sure, the organisers had pre-sold 2.5 lakh tickets through Kudumbashree raising Rs 1.25 crore before the event.
But the official said the organisers had Rs 40 lakh with them post-event. "If the GST Department presses with the tax, we can pay," he said.
That contradicts the final financial statement by the organisers that they had only Rs 13.54 lakh in hand. "Nothing about the event adds up. We did not even include rent from stalls at the venue," said Pradeep Kumar.