Taxmen zero in on two deals
While the Income Tax department and Enforcement Directorate officials on Thursday zeroed in on two key money transfers related to the Indian Premier League, the BCCI set about examining all the major deals Lalit Modi has entered into as IPL chairman, report Gaurav Choudhury and Kadambari Murali Wade. See special | It's not just cricketcricket Updated: Apr 23, 2010 01:21 IST
While the Income Tax department and Enforcement Directorate officials on Thursday zeroed in on two key money transfers related to the Indian Premier League, the Board of Control for Cricket in India set about examining all the major deals Lalit Modi has entered into as IPL chairman.
The I-T department and ED are looking into two transactions of $10.27 million and $15.3 million, remitted from the Development Bank of Singapore to a bank account in Mauritius. The money was remitted by Multi Screen Media from Singapore to the World Sport Group (WSG), Mauritius in two installments in April and June last year.
Both agencies are closely connected to the IPL. The WSG has won television rights for IPL for 10 years, while the MSM – owning channel Set Max – is the official broadcaster.
I-T department sources said these two transactions might be a part of the $80 million ( Rs 368 crore) “facilitation fee” that MSM paid to WSG in 2009 to ensure it retained the 10-year telecast rights for IPL.
“The tracing of the two installments will hold the key to the investigations,” a tax official said requesting anonymity. “It will also give leads about the individuals who have benefitted from this re-negotiation.”
On Wednesday, the IT department “surveyed” the Mumbai premises of MSM and WSG, as well as those of International Management Group (IMG), the organising agency, and the residence of Venu Nair, chief executive officer of WSG.
WSG had originally bagged IPL TV rights for 10 years starting 2008 with a bid of $918 million (Rs 4200 crore) and a commitment to spend another $108 million ( about Rs 500 crore) on promoting the event.
It had simultaneously signed a back-to-back deal with MSM that Sony Set Max would be the official broadcaster.
However, the deal was scrapped a few months before IPL 2009 was to begin.
MSM finally retained the rights for the remainder of the nine years that the deal had to run after a legal battle, but not before committing to dish out $ 1.63 billion ( Rs 7500 crore).
Meanwhile, BCCI sources said they would cancel all Modi deals they felt were dubious.
“We will be looking at all major commercial agreements that Lalit (Modi) and the IPL entered into,” a top BCCI official told the Hindustan Times on Thursday. “If we find evidence of that these deals were duplicitous in any way, we look at how to legally terminate them.”
“The BCCI cannot afford to have any kind of agreement that is not above board,” he added.
“This doesn’t mean we’re ending all deals,” said another official. “It doesn’t make practical sense to look at the minor ones. But the major ones will have to be re-examined and a call taken on them on a case by case basis.”
Major deals — apart from those being investigated by the authorities — that will be examined are the digital and mobile rights, both of which are currently with Global Cricket Ventures, Mauritius (in which Modi’s son-in-law Gaurav Burman has a 50 per cent stake through his private equity fund Elephant Capital), the Rs 330 crore theatre rights deal with UFO Movies and a Rs 600 crore deal with the television channel, Colors.