Pooja Gulati, director, Rendezvous Sports World Pvt Ltd, which owns the Kochi IPL team, speaks exclusively to HT. Excerpts:
What is ‘free equity’ in this case and why have some people been given free equity by the consortium that owns the Kochi franchise?
There is no free equity issued. Rendezvous Sports World Private Limited has been issued ‘sweat’ equity in exchange for management services to be rendered by it. It has been explicitly recorded in the joint venture document submitted to BCCI-IPL. It is absolutely wrong that some people have been given any free equity.
Why were you, Kisan and Pushpa Gaikwad, Shailendra Gaikwad, Sunanda Pushkar, Jayant Kotalwar, Vishnu Prasad and Sundip Agarwal given free equity? From what we understand, you are a director in the company and your husband helped structure the deal. What role do the others mentioned here have?
Straight off, my husband (StanChart’s Director Public Affairs Sushen Jhingan) has absolutely no role to play in this, and I am extremely upset that he was dragged into this. This is something that I have been involved in for a few years, as have some of the others. We were a group of friends and friends of friends, all cricket lovers, who got together in this some time ago.
As mentioned earlier, there is no free equity. Rendezvous Sports World Private Limited is responsible for rendering management services for which no management fee or consideration is going to be charged. You will appreciate that to run a franchise is not an easy task and till the break-even is achieved, a lot of funds need to be pumped in by investors/other shareholders. All the shareholders/stakeholders of the UJV (unincorporated joint venture) have reposed confidence in Rendezvous Sports World Private Limited that we will perform duties which will be allotted to us and shall cross the break-even as per the business plan.
Till the break-even is achieved, there is no return which will accrue or be realised by any shareholder or Rendezvous Sports World Private Limited. You can check with the owners of other franchisees how many of them have crossed the break-even stage after three seasons. The bidding for IPL IV has seen new heights. If we are required to pay franchisee fees, which are huge, we have to work very hard to ensure that the break-evens are achieved, as no investor puts in monies to earn losses. We are under tremendous pressure to perform and these rumours will only add problems to our performance.
What is the lock-in period?
What lock-in period are you referring to? In terms of the IPL tender documents and our UJV, any change in the shareholding/stakes in the UJV, directly or indirectly, will require the consent of the IPL. Hence, if your question is targeted at knowing when anyone could exit, I guess it will be public news and shall depend on the consent of the BCCI-IPL.
Who controls/owns Rendezvous Sports? On paper, it has 1 per cent of the holding, so how is it being called the controlling shareholder?
Rendezvous Sports World Private Limited has 25 per cent equity for rendering the management and administration services. To show our commitment to other stakeholders, we have also invested monies to buy a 1 per cent stake and shall run the investment risks like any other investor/shareholders /stakeholder. Further, it is absolutely wrong to say that Rendezvous Sports World Private Limited is a controlling stakeholder. The decisions shall be taken by majority, in a democratic way, just the way it happens in any board meeting. We do not control the management committee of Rendezvous Sports World but are answerable to them, like any other management team.
What role does Shashi Tharoor play in the Kochi IPL franchise?
Mr Tharoor acted as a mentor to us, guided and helped us to join hands.
Why was Sunanda Pushkar offered free equity?
As mentioned, there is no free equity allotted to Ms Sunanda Pushkar. Rendezvous Sports World Private Limited is responsible for the management and administration of the franchise.
What is the name under which the Kochi franchisee is registered with the RoC?
Rendezvous Sports World is an unincorporated joint venture, a permissible structure under the IPL tender documents. In terms of the UJV, and subject to the approval of BCCI-IPL, we shall create a Special Purpose Vehicle and transfer the franchisee to such a SPV. Please bear in mind that all the stakeholders shall continue to hold an identical stakeholding in the SPV, once it is incorporated.