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ED notice to cricket board, officials

mumbai Updated: Aug 28, 2012 01:18 IST
Manish Pachouly
Manish Pachouly

In yet another case of foreign exchange violation, the Enforcement Directorate (ED), on Monday, issued a show-cause notice to the Board of Control for Cricket in India (BCCI) for accepting Rs 60 crore as performance deposits for awarding contracts for the Indian Premier League (IPL) 2009-2010.

As part of the investigation into the IPL, the agency has, so far, issued 24 show-cause notices for contravention of various provisions of the Foreign Exchange Management Act (FEMA) by the BCCI, IPL franchises and banks, for an amount of Rs 2,052 crore.

The BCCI had accepted performance deposit of Rs20 crore from Emerging Media Sporting Holdings Ltd, UK, and Rs40 crore from MSM Satellite (Singapore) Private Limited. While the former company was a bidder for Rajasthan Royals, the latter had placed a bid for media rights. With BCCI’s registration as a society, it should have sought permission from the Reserve Bank of India (RBI) before accepting the deposits from the overseas bidders, said sources. “However, the BCCI failed to take RBI’s permission,” said an ED official.

The agency has sent notices to BCCI officials including its president N Srinivasan, vice president Niranjan Shah, former IPL commissioner Lalit Modi and to the private bank where the money was deposited.

The agency has asked the cricket board and others to explain why they shouldn’t be penalised. The ED can levy a penalty of upto three times the amount involved, which would come to Rs180 crore. The agency has also proposed a confiscation of the deposit of Rs60 crore received by the BCCI.

BCCI president N Srinivasan said he was not aware of the notice.