MUMBAI: In a swift and unexpected move with far-reaching consequences, Kings XI Punjab and Rajasthan Royals were scrapped from the Indian Premier League on Sunday.
The BCCI, after its IPL governing council meeting, announced that the two franchises' contracts were being terminated with immediate effect for violating shareholding and ownership patterns.
The Kochi IPL franchise has been given 10 days to incorporate their franchise and get their documents and money in place, failing which their contract will also be terminated.
The shocked team owners of King's XI and RR promised to take the fight to the courts. Preity Zinta and Shilpa Shetty, the faces of their respective teams, said they were too stunned to even react.
Inevitably, suspended IPL commissioner Lalit Modi's name was invoked: he is believed to have financial interests in both teams. BCCI president Shashank Manohar, however, denied any such motive, saying, "It is not due to any single person."
Kings XI and RR have been feeling the heat right from the time the board decided to increase the number of IPL teams to 10. With major politicians and mega companies aligning with different bidders, the fight turned ugly.
In the process, Modi got engaged in a direct tussle with former minister of state Shashi Tharoor, who had guided Kochi's successful bid. As the war became bitter, the government's investigative agencies got into the act.
They soon discovered that the IPL had apparently violated many laws of the country; they even claimed to have spotted money-laundering trails and foreign exchange violations.
King's XI and RR, who were alleged to have benefited because of their proximity with Modi, were seen as the worst culprits.
According to the two show-cause notices, copies of which are with TOI, Rajasthan Royals have been charged with three gross violations.
Addressed to Jaipur IPL Cricket Private Ltd, it said: "You had claimed that the Emerging Media (IPL) Ltd, UK (Bidco) would be the entity controlling the Indian holding company operating the franchise through its wholly owned Mauritian subsidiary. But you stepped into the shoes of the original bidder on the date of award of the franchise i.e., 14.4.2008, without being a group company or entity controlled by the bidder.
"Accordingly, under clause 11.2 and 11.3 of the franchise agreement, the contract has been terminated."
Shock Decision
Rajasthan Royals
Bid was presented by one company, agreement signed by another. Shareholding pattern too changed. Shares sold or transferred without permission of governing council.
Kings XI Punjab
Change in ownership patterns. Bidders were led by Preity Zinta, as chairperson of KPH Dream Cricket. But shares were held by ACEE Enterprises and Mohit Burman. In 2008, ownership patterns changed twice even though they had signed an agreement barring changes in first three years.
Team holdings
Rajasthan Royals: Originally owned by Emerging Media Group whose chairman is Manoj Badale. Other investors include Lalchan Murdoch, Aditya Chellaram, Suresh Chellaram
Team bought for $67m in 2008 auction
Latest investors
Raj Kundra and Shilpa Shetty purchased 11.7% in 2009, raising the team value to $130m
Kings XI Punjab: Owned by Preity Zinta, Ness Wadia, Karan Paul and Mohit Burman
Team bought for $76m in 2008
Who's Saying What
It's more than just a team 4 us... We're deeply saddened. Hope the fans support us!
Shilpa Shetty | Co-owner, Rajasthan Royals on twitter
Mulling legal options but I am not sure whether we can have IPL 4 if teams are treated like this.
Raj Kundra | Co-owner
3 seasons ago Royals won first ever IPL, underdogs come good, what a story! Now look. I hope BCCI come to their senses, fingers crossed!
Shane Warne | RR captain on twitter
I wonder if IPL franchisees are serious stakeholders whose investments and participation are respected or are they slaves who only come and play.
Vijay Mallya | Owner, RCB
The owners should get together and run the league on their own. This action is totally illegal. They (BCCI) are hell bent on destroying something that we as Indians are proud of - IPL - to satisfy their personal agendas.
Lalit Modi | former IPL chairman
After working so hard in IPL & putting my everything building this team this is not what I expected! Shocked!
Preity Zinta | Co-owner, KXIP
Key Questions
What happens to the promoters' investments?
They had to pay the sum bid at the auction over 10 years. So far, RR has paid about $20m and KXIP about $22m. In addition, there are player costs, match hosting expenses and brand-building budgets. This money is lost. But they also made money from sponsorships and gate receipts (ballpark estimate: $15m). Royals also got $5m for winning the first IPL and sold an 11.7% stake to Shilpa and Kundra for about $15m
What happens to the players of the two teams?
They will be put in the auction pool and any franchise can pick them up. The player auction will be held in January
Why did BCCI take such an extreme step?
Ostensibly, for unsanctioned changes in shareholding or ownership patterns. But political pressure following money-laundering charges and personal agendas may have played a key role too
Was it pushed into a corner by the govt?
It seems so. The ED's investigations have apparently revealed that IPL caused losses worth hundreds of crores to the exchequer through alleged money laundering and FEMA violations. Allocation of TV rights, mobile rights and other mega deals are also being probed
Did it have no option?
Apparently not. The govt had warned BCCI that if it didn't act, govt agencies would step in. That would have been disastrous for Brand IPL
Could it be a witch-hunt against Modi?
BCCI has denied it. But the Tharoor embarrassment has clearly not been forgotten. Modi is believed to have financial interests in both teams, at least through relatives
What can the 2 teams do?
They'll almost surely take the legal route
What about Kochi?
They have a 10-day breather. If they can resolve their disputes and form a company, they survive
What happens if Kochi gets axed too?
A fresh auction for three teams, or at least one, will be held by January. IPL-4 will be held in April-May as originally planned. It will become a 60-match, home and away affair, if it becomes an 8-team league. If it's increased to 10, there will be 74 matches
TOI
The BCCI, after its IPL governing council meeting, announced that the two franchises' contracts were being terminated with immediate effect for violating shareholding and ownership patterns.
The Kochi IPL franchise has been given 10 days to incorporate their franchise and get their documents and money in place, failing which their contract will also be terminated.
The shocked team owners of King's XI and RR promised to take the fight to the courts. Preity Zinta and Shilpa Shetty, the faces of their respective teams, said they were too stunned to even react.
Inevitably, suspended IPL commissioner Lalit Modi's name was invoked: he is believed to have financial interests in both teams. BCCI president Shashank Manohar, however, denied any such motive, saying, "It is not due to any single person."
Kings XI and RR have been feeling the heat right from the time the board decided to increase the number of IPL teams to 10. With major politicians and mega companies aligning with different bidders, the fight turned ugly.
In the process, Modi got engaged in a direct tussle with former minister of state Shashi Tharoor, who had guided Kochi's successful bid. As the war became bitter, the government's investigative agencies got into the act.
They soon discovered that the IPL had apparently violated many laws of the country; they even claimed to have spotted money-laundering trails and foreign exchange violations.
King's XI and RR, who were alleged to have benefited because of their proximity with Modi, were seen as the worst culprits.
According to the two show-cause notices, copies of which are with TOI, Rajasthan Royals have been charged with three gross violations.
Addressed to Jaipur IPL Cricket Private Ltd, it said: "You had claimed that the Emerging Media (IPL) Ltd, UK (Bidco) would be the entity controlling the Indian holding company operating the franchise through its wholly owned Mauritian subsidiary. But you stepped into the shoes of the original bidder on the date of award of the franchise i.e., 14.4.2008, without being a group company or entity controlled by the bidder.
"Accordingly, under clause 11.2 and 11.3 of the franchise agreement, the contract has been terminated."
Shock Decision
Rajasthan Royals
Bid was presented by one company, agreement signed by another. Shareholding pattern too changed. Shares sold or transferred without permission of governing council.
Kings XI Punjab
Change in ownership patterns. Bidders were led by Preity Zinta, as chairperson of KPH Dream Cricket. But shares were held by ACEE Enterprises and Mohit Burman. In 2008, ownership patterns changed twice even though they had signed an agreement barring changes in first three years.
Team holdings
Rajasthan Royals: Originally owned by Emerging Media Group whose chairman is Manoj Badale. Other investors include Lalchan Murdoch, Aditya Chellaram, Suresh Chellaram
Team bought for $67m in 2008 auction
Latest investors
Raj Kundra and Shilpa Shetty purchased 11.7% in 2009, raising the team value to $130m
Kings XI Punjab: Owned by Preity Zinta, Ness Wadia, Karan Paul and Mohit Burman
Team bought for $76m in 2008
Who's Saying What
It's more than just a team 4 us... We're deeply saddened. Hope the fans support us!
Shilpa Shetty | Co-owner, Rajasthan Royals on twitter
Mulling legal options but I am not sure whether we can have IPL 4 if teams are treated like this.
Raj Kundra | Co-owner
3 seasons ago Royals won first ever IPL, underdogs come good, what a story! Now look. I hope BCCI come to their senses, fingers crossed!
Shane Warne | RR captain on twitter
I wonder if IPL franchisees are serious stakeholders whose investments and participation are respected or are they slaves who only come and play.
Vijay Mallya | Owner, RCB
The owners should get together and run the league on their own. This action is totally illegal. They (BCCI) are hell bent on destroying something that we as Indians are proud of - IPL - to satisfy their personal agendas.
Lalit Modi | former IPL chairman
After working so hard in IPL & putting my everything building this team this is not what I expected! Shocked!
Preity Zinta | Co-owner, KXIP
Key Questions
What happens to the promoters' investments?
They had to pay the sum bid at the auction over 10 years. So far, RR has paid about $20m and KXIP about $22m. In addition, there are player costs, match hosting expenses and brand-building budgets. This money is lost. But they also made money from sponsorships and gate receipts (ballpark estimate: $15m). Royals also got $5m for winning the first IPL and sold an 11.7% stake to Shilpa and Kundra for about $15m
What happens to the players of the two teams?
They will be put in the auction pool and any franchise can pick them up. The player auction will be held in January
Why did BCCI take such an extreme step?
Ostensibly, for unsanctioned changes in shareholding or ownership patterns. But political pressure following money-laundering charges and personal agendas may have played a key role too
Was it pushed into a corner by the govt?
It seems so. The ED's investigations have apparently revealed that IPL caused losses worth hundreds of crores to the exchequer through alleged money laundering and FEMA violations. Allocation of TV rights, mobile rights and other mega deals are also being probed
Did it have no option?
Apparently not. The govt had warned BCCI that if it didn't act, govt agencies would step in. That would have been disastrous for Brand IPL
Could it be a witch-hunt against Modi?
BCCI has denied it. But the Tharoor embarrassment has clearly not been forgotten. Modi is believed to have financial interests in both teams, at least through relatives
What can the 2 teams do?
They'll almost surely take the legal route
What about Kochi?
They have a 10-day breather. If they can resolve their disputes and form a company, they survive
What happens if Kochi gets axed too?
A fresh auction for three teams, or at least one, will be held by January. IPL-4 will be held in April-May as originally planned. It will become a 60-match, home and away affair, if it becomes an 8-team league. If it's increased to 10, there will be 74 matches
TOI
No comments:
Post a Comment