Kalmadi, an MP with the ruling Congress party, was arrested for alleged irregularities in the Queen's Baton Relay event held in London before the Games and also for allegedly handing out contracts to Swiss Timing that provided equipment and services at exorbitant rates, causing a huge loss to the Government, according to a spokeswoman for the Central Bureau of Investigation (CBI).

Kalmadi, a 66-year-old former fighter pilot who has been President of the Indian Olympic Association since 1996, has denied the allegations and will seek bail when he appears in court tomorrow, according to his lawyer Hitesh Jain.

Two other senior officials on the Games' Organising Committee were arrested earlier for involvement in the same case.

The CBI accused secretary general Lalit Bhanot and director general V K Verma of causing a huge loss to the Indian Government by paying 1.41 billion rupees (£19 million/$31 million)) to Swiss Timings Ltd for equipment available from another company for much less.

Kalmadi has been arrested under Sections 120 B and 420 [criminal conspiracy and cheating] of the Indian Penal Code, said CBI spokesperson Dharini Mishra.

The evidence that the CBI is reportedly going to use against Kalmadi include statements of officials who opposed the Swiss deal and a speech of Kalmadi verified by his staff, during which he announced at a meeting that "Swiss Omega representatives are here [and] they are going to get contracts".

Kalmadi reportedly made the statement several months before the contract was officially awarded.

Swiss Omega representatives allegedly attended all the meeting of the Organising Committee and official minute records suggest the presence of Swiss Timing agent Anil Madan and his partner in the meeting.

Madan and his team was given access to high security stadiums much before contracts and they guided engineers about laying of cables, it is alleged.

The CBI has also summoned India representatives of Swiss Omega Gem International tomorrow.

They are also likely to be arrested, Indian sources claim.

The Swiss group, a subsidiary of Swatch Group AG, which has been timekeeper at several Olympics Games, most recently at Beijing in 2008 and is due to fulfill the same role at London 2012, have angrily denied that they are guilty of any wrongdoing.

Kalmadi was officially arrested after being was questioned for the third time today by the CBI over alleged irregularities in the conduct of Queen's Baton Relay held in London in 2009.

A CBI team recently visited London to probe allegations that at least one London-based firm was paid vast sums of money to provide basic services such as taxis and large television monitors.

Kalmadi was sacked as chairman of the Games Organising Committee in January as police investigated charges that they had manipulated tenders and knowingly inflated costs.


He was booed at the Opening and Closing ceremonies of the Games after becoming the public face for the organisational fiasco that caused India acute embarrassment on the international stage.

India's national anti-corruption watchdog, the Central Vigilance Commission (CVC), received complaints alleging up to $1.8 billion (£1.1 billion) of Games money was misappropriated.

An initial report by the CVC into the Games confirmed the use of sub-standard construction materials in a host of building contracts and deliberate cost overruns.

The case is politically sensitive because of Kalmadi's membership of the Congress party which is already fighting corruption scandals on numerous fronts.

Kalmadi was stripped of his senior position as a secretary of the party last November, but he still represents Congress in his home constituency of Pune in western India in the lower House of Parliament.

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