Shocking details of Modi’s dubious deals, ways revealed

Hindustan Times | ByKadambari Murali Wade, New Delhi
Apr 27, 2010 02:39 AM IST

If the other members of the IPL’s Governing Council are to be believed, suspended chairman Lalit Modi was involved in a host of irregularities, among the most shocking of which was the way he allegedly tried to arm-twist Rendezvous Sports World, the promoters of the Kochi franchise, into withdrawing their successful bid. Kadambari Murali Wade reports. X-files: Shetty on the prowl | Chirayubhai takes charge | See graphics | Suspension letter | Special

If the other members of the Indian Premier League’s Governing Council (GC) are to be believed, suspended chairman Lalit Modi was involved in a host of irregularities, among the most shocking of which was the way he allegedly tried to arm-twist Rendezvous Sports World, the promoters of the Kochi franchise, into withdrawing their successful bid.

HT Image
HT Image

“He told them he would engineer an environmental litigation against them, which would prevent them from building a new stadium in Kochi,” said a GC member. “He also said he could have them disqualified for not conforming to some standard or the other, and have the franchise taken away from Kochi and awarded to some distant town, either Bhiwani or Guwahati.”

Modi reportedly told Rendezvous he would “remove the cap on players' salaries so that Rendezvous would not be able to afford them, or compete with other (much wealthier) franchises” according to another GC member. "He said he would make a rule that would allow teams to retain seven existing players in the next season, so the best would be unavailable to Kochi,” the member added.

An official said Rendezvous had detailed these threats in writing and would be asked to appear before a BCCI inquiry committee looking into the charges against Modi.

Hindustan Times spoke to four GC members in an attempt to piece together the reasons for Modi's sudden fall from grace. All asked not to be identified, as an internal inquiry against Modi is on and he is yet to respond.

One revealed how Modi tried to rig the players' auction on March 7 by inserting a clause in the tender document that no one else knew about. The clause said corporations making bids would have to have a turnover of over $1 billion (Rs 4600 crore) and present a Rs 460-crore bank guarantee upfront. “By 5pm on March 7, after several telephonic exchanges, we found that basically, only two companies (Videocon and the Adani Group of Ahmedabad) met his conditions, so we cancelled that auction. Shashank (BCCI president Manohar) reprimanded Lalit and we decided that on the day of the new auction (March 21), the entire GC would be present to accept and open the bids. This was the time we started getting suspicious.”

Sources said at no stage were the cancelled bids from the March 7 auction returned to the BCCI, nor were copies kept in the IPL office. “Modi received them in person and kept them in his own office at the Four Seasons hotel in Mumbai. This was highly irregular,” said a GC member.

There was also the TV rights issue. According to sources, these were given to Sony (through a subsidiary, MSM Satellite Singapore), in January 2008 and “unilaterally cancelled by Modi in 2009”. “In March 2009, just ahead of IPL II, they were given to World Sport Group, Mauritius, and neither the GC nor the BCCI was informed,” said the source.

“Modi parked the rights in Mauritius for 10 days with WSG and then renegotiated an agreement with MSM. It was a private arrangement, signed by him without our knowledge. We didn’t have the documents. In fact, even when the income tax department asked us for the documents at 11am today, we had to say we didn’t have them,” the GC member told HT on Monday.

A clause in the new agreement said that if MSM owed any money to WSG Mauritius, their contract could be cancelled. This, a source said, was used by Modi to “virtually blackmail” MSM into paying WSG a facilitation fee. “MSM has admitted to us privately only now that they were forced to sign this at gunpoint (metaphorically speaking).”

Officially, however, MSM stated in a press statement on Friday that they negotiated “in an open and transparent manner and in keeping with applicable laws” and paid a “facilitation fee of Rs. 425 crore” to WSG Mauritius to “secure business interests” and regain the IPL broadcasting rights for the Indian subcontinent.

But BCCI officials maintain that this facilitation fee is the same money that government authorities have traced from “bank to bank to an account in the British Virgin Islands”. This could not be independently confirmed.

Another official told HT of how various digital and mobile rights “were allowed to be sold and re-sold” without the knowledge or consent of the Board. “It was smart, the way one company conveniently gave way to another company and then another, so that ultimately, all the rights landed up with the company (Global Cricket Ventures) in which his son-in-law’s private equity fund held 50 per cent of the equity,” a GC member said.

Again, the problem here lay in the non-disclosure of relationships. “At no stage did Modi tell the Governing Council, officially or otherwise, that his son-in-law or ‘co-brother-in-law’ were involved in the IPL. That’s a direct relationship,” said an official.

“Who is he to make accusations of conflict of interest? In (BCCI secretary) Srinivasan’s case, he asked and got permission before the first auction, plus, he’s not a majority shareholder in India Cements (who own the Chennai Super Kings).”

The charge that Council members say will not be easy to prove is that Modi owns shares, by proxy, in two, at least three teams, including the Rajasthan Royals and the Kings XI Punjab. The part that can be proved, they say, is that he “allowed irregularities” in the Royals’ ownership process.

“We were under the impression that the franchisee was Manoj Badale of Emerging Media, as he made the successful bid. After that, he in turn signed with Jaipur IPL Cricket Limited, out of nowhere. Again, we were unaware,” a GC member said. This point was also made in detail by BCCI president Shashank Manohar.

Meanwhile, though the irrepressible Modi was back to tweeting by Monday evening, he would not return calls requesting interviews or reactions. Earlier, when contacted on his UK number, Manoj Badale had earlier directed HT to his PR firm, which did not return calls either. Venu Nair of WSG has not responded to text messages seeking clarifications.

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