Sponsor may be sued if pulls out of Asian Games

Sponsor may be sued if pulls out of Asian Games

BANGKOK (Reuters): The Olympic Council of Asia (OCA) said yesterday it was preparing "in the worst case" to sue a Thai telecommunications firm that was trying to renegotiate a US$10 million sponsorship deal for the Dec. 6-Dec. 20 Asian Games.

"This is not the time for fair weather friends," an OCA spokesman said in response to comments by Samart Corp. that it hoped to reduce its sponsorship deal by $2.0 million for the 13th Asian Games to be held in Bangkok in December.

He said the Kuwait-based OCA and the organizing committee of the Asian Games had formally contacted Samart on Dec. 22 to "forcefully remind them" of their obligations.

A "last chance" letter would be issued on yesterday, he said.

Officials from the Bangkok Asian Games Organizing Committee (BAGOC) also said there was no question of allowing Samart to break its obligations for the Games.

"This has to do with a Thai company essentially defaulting on the Thai government and the Thai people and I seriously do not believe these people will do this," said Santiparb Tejavanija, marketing director and deputy secretary-general of BAGOC.

He said the deal was signed after the baht was floated last July. Since July the baht has plunged and lost more than 50 percent of its value against the U.S. dollar.

Samart officials have been unavailable for comment. Local media quoted company officials as saying earlier this week that Samart had been hit hard by the liquidity squeeze and currency turmoil that has accompanied Thailand's worst economic crisis in decades.

Santiparb said BAGOC had a fully executed contract with Samart and said the company was already "enjoying the benefits" of sponsorship of the Games.

It was already running a Games website, he said.

"There were no grounds, material or otherwise, for this company to make such a request," he said.

Under the agreement with BAGOC, Samart's technology support -- valued at 75 percent of the deal -- will provide the backbone to the results and communications of the Games.

The Asian Games, with about 10,000 athletes, is the second largest sporting event in the world, second only to the Summer Olympics.

BAGOC officials said they were prepared for a lawsuit or to lose the Samart contract.

Three-times Asian Games host Bangkok has been struggling to keep the Games in Thailand for the past few years, amid political upheaval, building delays and budget cuts.

Santiparb told Reuters Tuesday the Games would go on as scheduled despite recent budget cuts and said although some venue building was behind schedule, all sites would be ready by August.