MSM, the company which holds the telecast rights for the Indian Premier League (IPL), said on Friday that all deals related to the tournament have been conducted in an "open and transparent manner" complying with applicable laws.
"All transactions relating to MSM's acquisition of the broadcast media rights in 2008 as well as 2009, have been undertaken with full knowledge of all the parties; in an open and transparent manner and in keeping with applicable laws," MSM Satellite (Singapore) Pte Ltd said in a statement.
The Income Tax Department is looking into the alleged payment of USD 80 million facilitation fee to World Sports Group (WSG) by MSM for the telecast rights.
Refuting charges of impropriety in its dealings, MSM said allegations against it are "incorrect and completely unfounded".
According to the company, the facilitation fee of Rs 425 crore was paid for the original option fee of USD 25 million (about Rs 115 crore) to extend rights from six to 10 years, including an additional fee of Rs 310 crore over the nine-year contract period.
As part of the commercial negotiations, the net incremental amount attributable to WSG Mauritius for giving up its IPL Indian subcontinent rights is Rs 150 crore, MSM noted.
"MSM received tax advice from external tax experts that the transaction with WSG Mauritius did not attract India taxes and MSM has accordingly not withheld any Indian tax," it said.
The Board of Control for Cricket in India (BCCI), which owns the IPL, in March 2009 had terminated the then existing broadcasting rights of MSM.
MSM had acquired IPL telecast rights for the first time in January 2008.
BCCI later gave the rights to WSG Mauritius for a period of nine years from 2009-2017. Following that, MSM entered into a commercial negotiation to get back the rights with WSG.
"To facilitate MSM's condition for a direct contract with BCCI, WSG Mauritius agreed to give up its broadcast rights for the Indian subcontinent in favour of MSM, thus paving the way for BCCI and MSM to enter into a contract directly.
"In consideration for this, MSM agreed to pay WSG Mauritius a facilitation fee," the firm said.
Out of the total facilitation fee, MSM has till date paid Rs 125 crore to WSG Mauritius, and the balance of Rs 300 crore is payable in eight installments spread over the next seven years of the contract.
MSM noted it cooperated with I-T officials and provided them with details of payments made to BCCI and WSG Mauritius.
Earlier in the day, WSG said it has not used funds received in connection with the IPL broadcast rights for "inappropriate or unlawful activities".