Culpability of the collective

RETROFIT

BCCI cannot wash its hands of present crisis

Individual versus collective? That is the question I am asking today.Whose responsibility is it when the fur starts flying in anyenterprise engaged in commerce. Who takes the rap? Who carries the canfor financial defalcation or other misdemeanours? For the BCCI'scurrent travails, onedoesn't need to rewind too far back into the past. Take the Satyamcase. It is the best analogous refrence point for the BCCI set ofproblems. One man and those in cahoots with him - B Ramalinga Raju -brought shame upon the company and in the process India's tech sector.Yes, the individual was guilty, but so was the collective which inthis case was the board of directors comprising many eminents. Theywere guilty because there was collusive intent. They turned a blindeye to Raju's misdeeds and brazen appropriation of shareholder wealth.Prof. M Rammohan Rao, dean of Indian School of Business, managementprofessor from the Harvard Business School (HBS), Prof. KrishnaPalepu; a former Director of two IITs, Prof. V.S. Raju; a former UnionCabinet Secretary, T.R. Prasad, and the father of Pentium chip, VinodDham were on the board of Satyam and they failed to protectshareholder wealth from being destroyed. They enjoyed the benefits andperks of independent directorship, but they failed to oversee thecompany going on skid row. Ergo, they were equally responsiblefor Satyam's demolition. The government however, stepped in and proactively tried its best to salvage the beleaguered company. Acommittee consisting of Deepak Parekh, Kiran Karnik and C Achutan madeup the transition team till such time as Tech Mahindra bought itoutright. It was an efficiently managed operation without jeopardisingthe careers of its many thousands of employees or its businessinterests. The fact that a squeaky clean Anand Mahindra stepped in toarrest the decline worked in its favour. The faith in the tenets of corporategovernance had been restored and a company virtually on life supporthad been saved. And now turned around.
Cut to Indian Premier League, a sub committee of the Board of Controlfor Cricket in India, for long a commercial enterprise masquerading asa not for profit and non transparent organisation. The Governing Councilhad several members of the BCCI, all ex officio office bearers andhence above suspicion like Casear's wife. The GC also had three topIndian cricketers - Sunil Gavaskar, Ravi Shastri and Mansur Ali KhanPataudi. All of them reportedly did not have a clue as to what brothchairman and commssioner Lalit Modi was cooking. BCCI presidentShashank Manohar is an honourable man, completely clean, but hisexplanation that Modi did pretty much as he pleased does not wash.All 13 GC members are equally culpable. If you know that there was afiddle in the Rajasthan Royals and Kings XI Punjab shareholding andthat Jai Mehta surfaced as an investor in KKR in 2009, then what wereyou doing when IPL was being architected? Were you deep in the arms ofMorpheus or did you choose to ignore Modi's unilateralism because hewas making money in spades for the BCCI? This shocking apathy tofollow transparency and corporate governance norms has been doggingBCCI for years. Now it has blwon up in their faces.
From the time that the IPL came into being, the BCCI's character andhue has undergone a radical metamorphosis. It is now being viewed asan association of persons by the finance ministry's revenue departmentand not a non profit organisation registered under the Tamil NaduSocieties Act. As a BCCI sub committee, it is nothing more than awholly owned subsidiary of the body corporate called BCCI. IPL haschanged the underlying credo with which BCCI was formed and functionedtill 2008. It is now a purely commercial enterprise engaged inbusiness and commerce. It has dealings with broadcasters, advertisers,sponsors and can be hauled over hot coals for non payment of tax deductedat source for players, referees, coaches and support staff; servicetax and entertainment tax.
ET reported on April 27: "Sportspersons, umpires, referees, coaches,trainers, team physicians and physiotherapists, event managers,commentators, anchors, and sports columnists have been categorised as“professionals” and their services have been brought under the TDS netin 2008 by the Central Board of Direct Taxes (CBDT). BCCI iscontesting a contention by the income-tax authorities that the boardnot be categorised a not for profit organisation tag that allows it toavail a tax exemption. The Budget 2009-10 had also made changes in thedefinition of “charitable purpose” to ensure that entities operatingon commercial lines do not claim income-tax exemption. The Section2(15) of the Income Tax Act defines “charitable purpose” to includerelief for poor, education, medical relief, and the advancement of anyother object of general public utility. The board has appealed to theIncome-Tax Appellate Tribunal against the decision of Mumbai taxauthorities and is yet to make a fresh application to the local taxauthority for the tax exemption."
BCCI has been trying to hide behind the fig leaf of a non profit,charitable organisation. But this status is definitely a page inhistory now. The individual Modi is taking the rap. Yes, he wasarrogant. Yes, he rode roughshod over everyone and conducted businessin an extremely secretive manner. Equally important is the fact that acabal consisting Manohar, secretary N Srinivasan, IPL GC vice chairmanNiranjan Shahand GC member Rajiv Shukla had been trying to oust Modi from the IPLor at least reduce his clout, but Modi had smartly ringfenced himselfby keeping his benefactor Sharad Pawar in his corner. But when theheat got to Pawar and his 2-i-c Praful Patel, it got uncomfortable. Thesecret society called IPL functioned like an old boy's club. Everymember of the family was taken care of. N Srinivasan who was boardtreasurer in 2008 actually got a franchise, Sunny Gavaskar and RaviShastri who were employed by ESPN Star Sports got hefty $one millioncontracts from the BCCI, Rajiv Shukla is a beneficiary of equity fromKKR franchise owners Shahrukh Khan in his company Bag Films and so itcarried on. You scratch my back, I will scratch yours as cronycapitalism or in this case crony sportism took a garrotte like grip onthe enterprise.
The opacity in IPL was even more severe than Satyam. Nothing andnobody was allowed in. Now when Manohar says contracts were signed andthen presented to the GC in a fait accompli sort of manner, why didn'tanyone blow the whistle? Well, you can guess why? Comfort level. Yes,everyone was sanguine. Now that the can of worms has been thrown openfro the world to see and examine, the BCCI chooses to distance itselffrom the mess. Sorry, the hoi polloi are not willing to buy thisargument. Even if they were to accept that Modi was a flamboyantcrook, they reckon that the BCCI is equally guilty. In the dock is theBCCI and its so called autnomous nature. But the nature of the beasthas change and the government has got its toe in the door. As the doorlies ajar and the Government's roving inquiry opens it that much moreeasily, everyone of us is looking for some sort of accountability fromthe body that runs cricket. My fear is that now that Modi has beensacrifced as part of the eye for eye pact with the Government, thewolves should not be called off and the BCCI should not be allowed tocarry on as it wishes. The BCCI needs to be accountable and Modishould be made a victim. All eyes are on fornmer BCCI president A CMuthiah's challenge in the Supreme Court on 'conflict of interest'which essentially targets Srinivasan. The apex court should also lookat the larger issue of governance within the BCCI.
THREE FAUX PAS
*ET's screaming lead that home minister P Chidambaram has been askedby the PM to head the roving investigation into IPL. Response camefrom the venerable finance minister Pranab Mukherjee in his parliamenthouse office where he shouted at journos to get out of his room - allyou need is a pen and paper to carry out your scurrilous writings, didanyone check with the PM, HM or me before writing this nonsense? Thatis as conclusive a denial as any.
*ToI's big bang exclusive on page 1 saying that WSG MD Venu Nair hadbroken down during interrogation and accepted that a facilitation fee,sorry a bribe of $80 million had been paid at the time ofrenegotiating the IPL broadcast contract. The story had three bylines.Meanwhile, ET the same day had a diametrically different story on thesame WSG-Venu Nair affair. The following day WSG sent in a very strongdenial saying that the ToI story was hogwash.
*Finally, a bellicose Times Now went to town saying that as many as 27players had been indicted for match fixing by IT authorities in the2009 season. This was a bombshell and everyone covering the IPLimbroglio including this writer was in a state of shock. Minutes latercame a strong government denial that there was no truth in this.