Sahara withdraws Cricket team sponsorship, out of IPL

11-year old deal comes to an end as Supreme Court deadline to declare assets approaches

Sahara India on Saturday ended a eleven year old sponsorship deal with the Indian cricket team. The group said today it has ended financial ties with the Board of Control of Cricket in India (BCCI) and also pulled out of the Indian Premier League (IPL) by withdrawing from Pune Warriors' ownership just hours before the players' auction.

The premature termination of the agreement with BCCI comes nearly two years ahead of its original close amid disastrous performance of the touring Indian cricket team in Australia and an approaching Supreme Court deadline to declare enough assets to cover liabilities to 23 million in controversial debentures.  Sahara was given three weeks’ time by the apex court on January 20.

Two Sahara group firms Sahara India Real Estate and Sahara Housing Invest Corp have been banned from raising money by Securities and Exchange Board of India (Sebi) for alleged violations of public issue norms.

The two firms have been directed by Sebi to refund over Rs 24,000 crore raised by issuing optionally fully convertible debentures (OFCD). Though the Securities Appellate Tribunal has upheld the decision. Sahara has challenged this in the Supreme Court, which last month has directed the firms to secure assets for the  refund to investors.

A significant portion of the money raised in the OFCDs were invested in several group companies including Aamby Vallye limited. Sahara, which has been the team sponsor for 11 years, signed a renewed agreement with the BCCI on July 1, 2010 till December 31, 2013.

The statement issued in the name of Sushanto Roy, Managing Director Sahara Adventures Sports Limited was issued minutes before the auctions for Indian Premier League season five auction. Sahara Group is the official sponsor of the Indian cricket teams since 2001 and is also the owner of the Pune Warrior. The statement also said that Sahara is reinvesting in setting up 20 sports promotion centers with an international standard sports academy.

The group is also planning to give Rs 10 crore support every year for the underprivileged sports achievers of yesteryears and other socia development activities like proving 300 fully equipped medical vans for remote villages, 100 plus tankers for safe drinking water, 10,000 screens with dish antenna for villages for overall literacy and education.

“Our association with team India was primarily emotional and all along the journey was indeed a privileged one for the entire Sahara India Parivar. In 2001, cricket was not as rich but had become a religion in our country,” the statement said.

The group in the statement also said, now after 11-year journey as sponsors we can say with surety that cricket has become very rich.

Many rich people are there to support cricket with a strong will to do so. So with absolute peace of mind we can exit from cricket under BCCI and re now exiting with a heavy heart.

The group also criticized the BCCI for its one sided approach and its various other decisions including sponsorship, IPL matches among others. “The one sided emotional relationship cannot be dragged any further. We are withdrawing from all cricket under BCCI. However we don't want to give any problem to the BCCI and we also feel that players should not suffer. BCCI will definitely take 2-4 months to get a new sponsor and we will continue paying the sponsorship money till then.”

On last year's IPL the group said that on the basis of information available 94 matches were supposed to play among 10 teams. The bid price was accordingly calculated but only 74 matches were played. “We are still pursuing continuously with the BCCI to refund the extra bid money proportionately. It has been denied on the basis of strict rules,” Roy said.

Sahara is planning to divert cricket money for social activities and plans to put Rs 1,000 crore in welfare foundation. “We are declaring to put immediately Rs 500 crore in Sahara Welfare Foundation,” said the release. The group plans to put around Rs 500 crore more in the next 1-2 years as per the need of the programme.

Further Roy said, “We are working on various programmes including financial implications etc since we have taken this decision after continuous persuasion with the BCCI failed. We waited up to the auction day that our request to BCCI would be accepted. But again, there was no natural justice.