The bidding process for new franchises of the Indian Premier League (IPL) cricket series has come under a cloud, with Shashi Tharoor — minister of state for external affairs — today alleging undue interference by commissioner Lalit Modi during the process.
Tharoor alleged Modi made various attempts to pressure the consortium, which eventually won the bid for the Kochi team, to abandon the bid in favour of another city in a different state.
The bidding for two new franchises of IPL was held last month.
The Kochi team had been bagged by a consortium led by Rendezvous Sports. Sunanda Pushkar — a close friend of Tharoor — has 18 per cent stake in the company, by virtue of which she holds a 5-per cent stake in the Kochi team.
The winning bid of Rs 1,533.3 crore, from little known Rendezvous Sports, surprised the world’s cricket fraternity. This was Rs 84.3 crore higher than Adani Group’s bid and Rs 62 crore higher than that of Videocon Group, which were the hot favourites.
Tharoor had supported the bid by the Rendezvous Sports consortium.
He has, however, questioned the transparency of the bidding process, alleging Modi, by publicly raising issues relating to the composition of the consortium, was attempting to discredit the team and “create reasons to disqualify it so that the franchise can be awarded elsewhere”.
The challenge from Tharoor, as well as fears the consortium might go to court, forced Board of Control for Cricket in India (BCCI) to swiftly swing into action. It has called a meeting of the governing council in the next 10 days to take a final call on the controversy.
Rajiv Shukla, chairman of BCCI’s media and finance committee, confirmed that President Shashank Manohar had called for such a meeting.
BCCI has, however, ruled out any possibility of a rebid for the Kochi franchise.
Modi could not be reached and kept quiet today, merely saying he would give all the details to the governing council of BCCI, according to a TV channel.
On Monday, Modi alleged on the social networking site, Twitter, that minister Tharoor had phoned him with a request not to get into the details of ownership of the Kochi team owners.
Tharoor countered by saying that Modi was delaying approval of the franchisee despite all legal requirements being fulfilled. He also said Modi had submitted the consortium members to a barrage of questions, seeking excuses to delay the approval. It was only then that Tharoor intervened.
Modi also put out details of the shareholding of the team, with the names of the companies and individuals on Twitter, which the consortium says is a clear breach of contract. Modi maintains it is public information.
One of the key shareholders of the consortium — Vivek Venugopal — has written to BCCI citing the confidentiality clause (19.1) in the Franchisee Agreement, which clearly states that both parties would treat its contents as being private and confidential, and should not be disclosed to anyone, except on certain conditions.
These conditions are: if both parties agree to do so after an agreement or if it is required by any statutory, regulatory or governmental or quasi governmental authority , pursuant to the rules of any recognised stock exchange or as otherwise required by law.
Modi, they say, did not follow the rules and revealed the names within a day. Venugopal was not available for comment.
Existing franchisees are also agreed on confidentiality. Says a top official in Delhi Daredevils: “Of course, nobody should disclose confidential information to public. It is a breach of trust.”
The Adani group is believed to have had the blessings of Chief minister Narendra Modi, who wanted a local cricket IPL team.
Sahara, which bid the highest for Rs 1,702 crore, chose Pune as their preferred city.
The bid for the two franchisees had to be cancelled earlier, after it receieved poor response from potential bidders because of stiff pre-conditions which included that a company had to have a net worth of $1 billion and would have to give a bank guarantee of $100 million which was considered very steep before it bid.
As a result only three bidders, out of which one was conditional, came to the fore and Modi was forced to retract and go for rebidding.
Succumbing to pressures from companies he reduced the pre bid conditions — now a bidder had to give a bank guarantess of $10 million and the $1 billion net worth clause was removed.
