A closely guarded club now open to examination

GROUND ZERO

RAISING CAIN OVER IPL - THE SECRET SOCIETY

Two stories on two successive days. Both pertaining to IPL, but in tworival papers - first Business Standard and then in Economic Times.Both radically divergent. The BS story was a mini bombshell as itdealt with two unnamed Cabinetministers who were reportedly influencing the promoters of the Kochifranchise to get out. Of course it read more like threatening them with direconsequences if they didn't exit in double quick time. The writer wascareful not to name the two powerful ministers, but it certainly leftnothing to imagination if you follow politics in the rajdhani. Thesame evening Headlines Today had the writer of the story - AditiPhadnis - on the panel. While her answers were wishy washy, it was theGaikwads, co owners of the Kochi franchise - Rendezvous Sports World -since sacked from their respective positions as spokesperson and CEOwho appeared extremely shifty to me. During the course of theinterview, they appeared uneasy and unwilling to say anythingsubstantive, but when faced with a direct poser on whether they werethreatened by union ministers and asked to pull out of the venture,they were categorical in their answer. It appeared to be anunequivocal No. Subsequently, they made other allegations and havechanged their story repeatedly. And this is worrying, for by changinggoal posts, repeatedly, they have left their credibility wide open toquestion. Maybe that is why on Thursday night they were summarilyreplaced. Rendezvous spokesperson Satyajit Gaikwad till Thursday, aformer Congress MP and Ranji Trophy player has changed his tune somany times that nobody believed him by the end of it.
But it is the brazen rejoinder carried by ET on Thursday morning whichintrigued me. It was an outright denial of the BS story where SharadPawar, the man purportedly at the centre of the BS story, came onrecord. Which means that the paper didn't get in touch with Pawar, butPawar's media managers approached ET with the story. The carefullywritten story spelt out how the Kochi promoters visited Pawar for hisblessings and asked him whether they could switch from Kochi toAhmedabad.
The BS story was dramatic. I am surprised that BS ran a story of thissort in the first place. BS is a staid and very conventional paperwhich avoids controversy. Even if the story was true, it would beloath to run it. Unless someone extremely powerful in the Congress wastrying to cut Pawar and the NCP to size. We are aware that the battlefor supremacy between the Congress and NCP is a long standing one.This is the essence of the ET rejoinder to the BS story: UnionAgriculture Minister and ICC president-designate Sharad Pawar onThursday disclosed that key members of the Kochi consortium now wantedthe team to be based out of Ahmedabad, instead of Kochi. He said thatfour members of the team had met him with a request to help them intransferring the team to Ahmedabad. He declined to name the members ofthe Kochi team.
Now the BS story. It needs to be reproduced in toto for widerdispersal: Asked to take money and withdraw, the successful butfrightened Kochi franchise winners seek Sonia's protection. Harassedand bullied, the Kochi franchisees of cricket's Indian Premier Leaguehave sought the protection of Congress president SoniaGandhi from two Union cabinet ministers, who allegedly wanted them outof IPL.
At least two of the seven investors of Rendezvous Sports World (RSW),that won the franchise for Kochi, were last week summoned to theMumbai residence of a Union cabinet minister and told to back off frombidding for Kochi or else. "We have many ways to take care of thelikes of you," the two now-scared investors were told at the end of aconversation with the minister that began at 10 pm and went on till 4am. They were told to go to Delhi to meet another minister from thesame party, who apologised for his colleague's conduct but repeated:"Get out of IPL. Sell the team."
The two investors are not helpless individuals. One of them runs anindustry. Another owns a broking firm and deals in precious gems. Theyare millionaires. But, they say, when they decided to invest incricket, they did not think they were putting their lives in theirhands. The story begins a year ago, when a group of seven high net worthindividuals decided that in the next one year, IPL would be ready tolaunch two new teams and this could be a good investment opportunity.
The group of seven was led by a banker. As Kochi was one of thevenues, the group decided it would be helpful if an electedrepresentative from Kerala were to support the venture. Theyapproached Shashi Tharoor, who recognised the political spin-off andsupported the holding of his companion, Sunanda Pushkar. Pushkar hasfive per cent holding in the team, not 20 per cent as widely reported,a member of the consortium said.
RSW was a group of sport lovers which had been doing some charitysports events, but was not well known. The stakes for bidding werehigh – the company was required to have a net worth of $1billion (Rs 4,500 crore).The group decided it needed some financialballast and managed to rope in J P Gaur of the Gaur group. "We thoughtthat if we have to compete with groups like Hero Honda and the Jaypeegroup, we needed someone with deep pockets and an appetite for risk,"said one of the RSW members.
At that point, it was clear that there were at least two other venuesfor which bidding was on aggressively — Ahmedabad, sought by theAdani group and Pune, sought by Videocon and Sahara. Gaur decided hewanted to compete independently and walked out. The financial ballastwas gone.
Then, RSW realised they were being edged out of the game. They pulledstrings in the Board of Control for Cricket in India (BCCI) and gotthe threshold lowered to 10 per cent of the original figure: Rs 46crore. The first lot of bids was cancelled and rebidding was scheduledin Chennai two weeks later.
It was a Sunday morning. A cricket match was on in Chennai. Fivecompanies were in the fray: Adani, Videocon, RSW, Cyrus Poonawallawith builder Ajay Shirke, and the Sahara group.
RSW got the first inkling that something was not quite kosher whenthey got a message that their bid should be below $300 million. Theyconsulted among themselves and kept the bid at $333 million (Rs 1,533crore). Sahara bid $370 million (Rs 1,702 crore). Videocon's bid was$320 million, Adani bid $315 million. Theirs was the closest and theygot the franchise.
The members wanted to pop the cork. Too early, cautioned their leader.Get the letter of franchise first. They met IPL Commissioner LalitModi in Delhi. The daughter of one of the ministers was present in theroom. This was when suggestions were made that they should take $50million and walk away.
The group was first amused, then flummoxed. "Suppose we walk," askedone, "who is going to give us $50 million?"
An investment banker, was the laconic reply.
"Come on," said the leader. "I am an investment banker. I know no onewill pay this order of money."
"A client of an investment banker," they were told.
The group conferred among themselves and said prestige was involved."We won't go," they said.
That was not the end. The letter of franchise was delayed on one orother pretext: Contingent liability, declaration of shareholdingpattern, finally, a 10 per cent bank guarantee. The message at the endalways was: "Why get into this ? Sell the team."
The last straw was the meeting at the minister's bungalow.
The group has finally decided that if political power is what will getthem justice, they, too, will knock at the door of politicians.Meanwhile, although the consortium is not breaking up, the strain istelling on it. Shashi Tharoor has confided in friends that he may haveto put off wedding plans. Sunanda Pushkar is close to a breakdown. Thetwo Gujarati investors have hired additional personal protection forthemselves and their families.
"The game was to get us out and give the franchise to the nextbidder" said a member of the consortium.
This is when a franchisee has to look at 40 to 50 per cent losses inthe first two years. "We are looking at a net loss of Rs 100 crore atleast, for the first two years" one of them said.
Neutral observers say the episode is a clash between two groups of"very clever people". "The conflict of interest in Lalit Modi's caseis clear: His son-in-law has been given web advertising rights and hisbrother-in-law has a team. And, in Shashi Tharoor's case, the womanwhom he is going to marry has been given free equity worth Rs 75 croretoday but it could be worth Rs 500 crore a few years from now. And,when you look at it, the minister of state in charge of the MiddleEast also has 100 per cent of his business in the Middle East: doesthat sound like propriety?" asked a member of the BCCI governingcouncil.
Now , who should one believe? BS and its dramatic recounting of eventsor ET and its straight laced denial. The BS story noted that $50million was offered to them by Modi to exit from the franchise. TheGaikwads who have since lost their exalted positions endorsed thisview the next day on telly channels. Modi, meanwhile has threatened tosue them for making such baseless charges. What amazes me is that $50million isn't small potatoes. It works out to Rs 220 crore at thecurrent exchange rate. If Modi or the ministers did make such anabsurd claim then we are talking about Rs 220 crore of slush moneybecause it is obvious that the payment wasn't going to be made bycheque. The BS story says that a union minister's daughter was presentin the room. Scary. Was Pawar's interview to ET a damage limitationexercise? Or did the union ministers indeed act like mafiosi? Why wasoperation cover up necessary?
From day one the Kochi enterprise stinks to high heaven. Disparateindividuals coming together to form a consortium, free equitydisbursed for professional services rendered to dubious people, justone of the promoters - Vivek Venogopal of Elite Group holding 1 percent of the equity - representing Kerala and the rest with Gujaratibusinessmen and assorted Maharashtrians. A union minister giving hisblessings to a venture led by Gujarati businessmen for the upliftmentof cricket in Kerala and the Malayali diaspora in the middle east.Bizarre. A mysterious woman linked to the same union minister (readyto be married to him) given free equity. The woman works for a realtyfirm in the Gulf. Won't suspicions be raised if this was thebackground of an entity, however wealthy it is?
ET followed up with another good story on Friday. It provided thebackground about the social climbing Gaikwads. Here are excerpts fromthe story: The Gaikwads, who originally hail from Umarga in Osmanabaddistrict, own around 7 acres of farmland and their parents, who aresaid to be clueless about their sons’ business activities, still workat the farm themselves. Ravindra Gaikwad, who was serving at theAndheri RTO till his transfer to Beed in Marathwada in December 2009,has proceeded on long leave for obvious reasons. His role in a Rs100-crore imported bike scam — this has no connection with crickters —is still being probed by the state government.
This politician recalled how Tendulkar, Zaheer Khan, Vinod Kambli andformer test captain and chief selector of BCCI Dilip Vengsarkarattended the marriage of Mr Gaikwad’s sister three years back inSolapur. “I myself attended the reception and the kind of bonhomiethat was on display between the Gaikwads, especially Ravindra, and thecricketers, was quite conspicuous,” the politician told ET.
“He had made a lot of money and it all attracted a series ofinvestigations ordered by the state government wherever he was posted.He perhaps did not know where to invest the money and the IPL thingjust happened in time for him. Through his contacts in cricket, andactivities of Pushp Cricket Academy that he had founded, Ravindra knewthe world of cricket inside out,” the politician said. But he alsoexpressed surprise over the Gaikwads’ association with Kochifranchise.
Another prominent Solapur resident, who, in fact, lives close to theGaikwads’ sprawling bungalow called Pushp in Solapur’s toniest addressAntrolekar Nagar, told ET that the Gaikwads had a flashy life-stylethat always kept them in the public glare. “They have a pet foreignbreed and I am told they bought it for Rs 12 lakh. Then, there areswanky cars and SUVs,” the person said, adding, however thatRavindra’s parents have all along led a simple life.
I am in agreement with Modi when he says that backgrounds of suchpromoters needed to be authenticated by IPL. After all there is noconsistency whatsoever in their backgrounds. It appears that a hastilyput together conglomeration of individuals all glamour struck by IPLwent to bed, without being on the same page. However, when Modiattacked a union minister, it gave them an opportunity to go after theIPL, its boss and the franchisees who form a secret society. What Modihas managed to do is make media quickly forget the Shoaib-Sania-Ayeshatamasha.