Push has come to shove

CAPITAL VIEW

Push has come to shove on the lack of transaparency and level ofdisclosure by IPL franchise owners. With the tax and Enforcementdragnet widening daily and more dirt surfacing, everyone is keen onseeing this investigation taken to its logical culmination. Ministerstheir kith and kin, big business houses, opacity regardingshareholding and tendering processes, routing of payments and fundsthrough offshore tax havens. And above all the sleaze and grime taintof betting. Money is the overriding theme of this classic but shadowyworld of crony capitalism. Nine of the ten franchise owners have beenraided, the only exception being Mukesh Ambani's Mumbai Indians.Actually a wholly owned subsidiary of Reliance Industries - RelianceIndustrial Investment Holdings - is the owner of IndiaWin Sports PvtLtd which controls Mumbai Indians.
Incidentally, RIIHL is the company in which the 12.04 crore PetroleumTrust shares amounting to 3.68 per cent of RIL's equity is vested. Theacquisition costs and initial losses were all borne by RIL in IndiaWinSports as RIIHL advanced a Rs 78 crore loan to it. RIL's Annual Reportfor 2008-09 clearly shows RIIHL as a 100 per cent subsidiary on page130. Recently we heard that Deutsche bank's Anshu Jain has exited fromMI and his 15,000 shares have been acquired by Teesta Retail. Overtime, the shareholding of this enterprise has changed completely andIndiaWin spokesperson has confirmed this.
Sometime in 2009-10, two Mukesh Ambani companies - Claris Trading andSharanya Trading acquired 32 per cent equity in Shinano Retail Pvt Ltdfrom RIIHL which owned 50 per cent in Shinano Retail. This means that18 per cent is now held in Shinano by RIIHL, while the balance 32 percent is held by Claris and Sharanya. The remaining 50 per cent is heldin Teesta Retail, the company that bought back shares from Anshu Jain.Most interestingly, the 50 per cent equity is now held inter sebetween Teesta and Shinano in IndiaWin Sports through a waterfallstructure that ends up looking like this - Shinano owns 20 per centwhile Teesta owns 30 per cent of the 50 that they jointly hold in MIvehicle IndiaWin Sports, the balance being held by RIIHL. EffectivelyMukesh Ambani companies now own 100 per cent of MI.
It is only after the ownership structure controversy broke thatdisclosure was made on Anshu Jain's exit at par, but even now completedisclosure has not been made of Claris and Sharanya's holding in thecompany. Valuation is clearly playing a big role in the plans of thowners. But for the unseemly controversy, many of the franchises wouldhave listed their teams on the stock exchanges next year. But the bestlaid plans of mice and men often go awry and this time a simple tweetbrought the house of cards down.
Pre crisis, most analysts reckon that a valuation of anything between 3x to5x had crept into the system after the entry of two new teams atexorbitant numbers - between $333.33 million and $370 million. MukeshAmbani might have paid $111.9 million for the franchise, but histeam's valuation at present enhanced levels is closer to $400 million,or a multiple of 4x. As I write this MI is enjoined in a scrimmagewith CSK. If MI wins season 3 and operation clean up is fashionedwithin the cricket board and IPL, then MI's valuation goes through theroof. And Mukesh Ambani is richer for it. Not that he needs the money.After all he is the third wealthiest man in the world.

Media circus turns against its own creation

RETROFIT

Media musings on MODIGATE

Jin mein ho jate hain andaz e khuddai paida, humne dekha hai woh buththod diye jaate - this line from Iqbal sums up the demolition derbyunderway in the IPL circus. Casualty number one was Shashi Tharoor whohad to be taken out kicking and screaming after telling NDTV's BarkhaDutt unequivocally - I will not resign. In the Puff Daddy, sorry bigdaddy of puff jobs, replete with an emotional scowl, Tharoor wasn'table to convince anyone watching of his innocence. Surprisingly,Barkha Dutt's line of questioning was so tepid and innocuous that theinterview appeared to be a farce. And farce it was for as soon as thePM returned, it was game, set, match and championship to Lalit Modi.Since then Tharoor has spoken again in parliament and nowhere has headdressed the issue of his relationship or the level of hisinvolvement with the Kochi enterprise. And pray, why was his OSD JacobJoseph present at the bidding, if he was only giving his blessings tothe venture as a mentor? Anyway, Tharoor has walked into the sunsetand since then targeted in the media's crosshairs is Lalit Modi,everyone's favourite whipping boy at the moment. I was telling thehead of a network only the other day over a cuppa of tea that themedia has forgotten Shoaib and Sania in a jiffy, obsessed as they havebecome with the more juicy Su, alias Pinky affair. He agreed. Butmedia has a short memory. Let me tell you why I am saying this.
In 2008 when the first lot of eight bids were architected, all of usin the know were aware of Suresh Chellaram's connection with Modi,just as we were aware of Mohit/Gaurav Burman's connection with thesame Modi. Or Amar Bindra's (son of Punjab Cricket Associationstrongman I S Bindra) presence in the Kings XI Punjab management ecosystem. Or the fact that the treasurer of the BCCI, a leading southernindustrialist N Srinivasan acquiring the Chennai franchise. Over time,civil aviation minister Praful Patel's daughter Poorna was made headof hospitality and marketing in the IPL. And so it carried on. It wasone big happy family. A high table, strictly by invitation. Media wasfirmly in Modi's corner and the smooth talking, linen suit attired IPLcommissioner rode out one storm after another. This included manyscrimmages within the BCCI where cabals tried their level best to takedown the unilateralist Modi. But he survived it all with great aplomb,realising at one level that he had Sharad Pawar minding his fortunesand at another he was making more moolah for the cricket board thanthey had ever seen in their lives. The ongoing Income Tax survey ofthe IPL estimates that total income from season 3 alone will be anastonishing Rs 1170 crore, a net profit closer to Rs 573 and a taxliability of Rs 172.5 crore. How is that for big bucks?
Probity and propriety are at the core of the issue. There is also thequestion of shareholder and investor compliance. After all as many asfive of the eight existing franchises are public limited companies.Every day now is a new day, with new dirt emerging. But a lot of itsadly is well known and well documented. Unfortunately, elephants andcamels have been brushed under the carpet and Modi till recentlymedia's darling has become the target of their collective ire. TakeET's lead story on Tuesday morning: Rajasthan's land deals at thecentre of IT probe on Modi. Good? No lousy actually for Outlook wrotea brilliant cover story last year on Modi where they nailed him to thewall. The story which appeared in the February 2009 issue dealt withModi's high handedness, his operating out of the Prince's suite ofRambagh Palace hotel, his proximity to Rajasthan chief ministerVasundhra Raje and in the main dealt with the fact that Modifunctioned as a super chief minister in the state. It was a hit job,hatchet job, call it what you will, but Modi survived that too. ET'sstory had no meat of consequence, it was nothing but a pale imitationof the real McCoy - the Outlook cover story. Let me give you a flavourof that Outlook story:
*He operated as a ‘Super Chief Minister’ from the opulent Rambagh Palace Hotel*Used his proximity to then CM Vasundhararaje to control key civilservants who would take files to his hotel suite*Facilitated entry of big builders in the state. Every big land dealhad to have his clearance.*Influenced change in the liquor policy which led to the proliferationof liquor outlets. Became an election issue.*Had a finger in every pie, including mines*Personally acquired havelis in Amer by bending the law*Has an extravagant lifestyle, owns a private jet. Would stay for daysin the luxury suite of the Rambagh Palace Hotel.*Influenced the enactment of the Rajasthan Sports Act to gain controlover the Rajasthan Cricket Association (RCA)*Accused of forging signature to become a member of the RCA*Rode roughshod over anyone who crossed his path, whether it was aconstable or an IPS officer. A slapping incident sparked a near-revoltin the Jaipur police.*Was named in an FIR for misappropriation of RCA funds. The money hassubsequently been deposited with the RCA.*Convicted in the United States for possession of drugs and kidnapping in 1985
Now tell me what additional information did ET write a year later asthe lead story on the morning of Tuesday? Other than the fact that itquoted Ashok Ghelot, chief minister of Rajasthan. But as I said publicmemory is short and media memory suffers from selective amnesia offand on. Then there was a fascinating ToI story on Tuesday itself whichdealt with the facilitation fee - $80 million - paid by WSG inMauritius while renegotiating the IPL broadcast rights contract. Therecipient being Modi. That story was a dead ringer and a sure shot forpole position, but I guess the fact that both bid documents ofVideocon and Adani were missing was equally important. HT as alwayshas been a washout with the only story of consequence being theallusion to a senior cabinet minister's son in law being given sweatequity in the Videocon bid. But the display was pathetic. Logic saysthat Modi has to go, just as Tharoor had to go. But will he? Or willhe drag the entire edifice of the BCCI, its apparatus and aImost allthe big players connected with it down with him? Pawar was Modi'sbenefactor, he got him out of many a scrap. I am sure Modi has enoughdirt on his fellow travelers in the board and IPL. After all he isalso a veep in the board and heads its tours and fixtures committee aswell. This time the Congress wants revenge, it is seething atsacrificing Tharoor. Will it be quid pro quo? Modi for Tharoor toretain the code of silence or omerta over the BCCI's functioning andfinances? Both Modi and Tharoor at one level are flamboyant andarrogant. They believe in speaking their minds, both have a foot inthe mouth disease. Both are unilateralists. Both use Twitter. Tharoorsurvived many an attempt to destabilise him, just as Modi has survivedmany a palace putsch. Modi's body language and lingua franca at theairport on his arrival from Dubai was combative, not one of someonecowed down or wounded in battle.
Does Modi have something left in the tank? Modi's benefactor Pawar mayhave turned against him because he reckons he too might be singed bythis IPL heat, but KK Modi's scion has many powerful backers. Hisbackers include franchise owners like Mukesh Ambani, Vijay Mallya,Shahrukh Khan et al who have clout and influence right to the top ofthe political pyramid in the capital. Will Modi take the fall or willhe be able to pull off another Houdini act? Monday will tell us.

Bombardier Challenger in the crosshairs

The mysterious Modi jet

Sunday Guardian

IT and ED sleuths are trying to draw a bead on IPLCommissioner's Lalit Modi's Bombardier Challenger 300 series luxuryjet which he seems to have 'acquired' sometime in 2008. Modi wasreportedly using Cyprus and Mauritius bank accounts to funnel hismoney abroad.The Challenger 300 charter jet, considered asuper-mid-sized aircraft, is produced byBombardier Aerospace Company. Developed in 1999 and previously brandedthe 'Bombardier Continental', this executive business jet was renamedChallenger 300 in 2002. The Challenger 300 is a twin engine businessjet, capable of traversing trans-continental distances. It has animpressive range of over 3,000 nautical miles and can hit speeds of upto 528 mph. The Challenger 300 has one of the widest cabins of anyprivate jet in its class stretching over seven feet. This spaciouscabin is typically configured for eight passengers and two crew,making this luxury jet sophisticated and extremely comfortable.Premier League boss Modi has been using this jet to fly around thecountry and abroad. The plane was acquired in Ireland. Golden Wings, aMumbai-based private charter firm that operates the aircraft in Indiaacquired it on lease from Peel Aviation, a Shell company in Ireland.According to industry sources the aircraft, a 2007 Bombardier modelwith a registration number VT-RAK is worth $19.21 million.Considered a best of breed jet, it is chartered at approximately asteep Rs 2.75 lakh per hour.In addition to a standup cabin, a luxurious toilet and a satellitephone the luxury jet also has a gallery to store food, a microwave, acoffee maker and tea maker. It is not known whether Modi owns theaircraft or leases it from Golden Wings, but speculation has been rifethat he owns it and this is what IT and ED are investigating. For theaircraft costs close to Rs 90 crore.

Hattangadi speaks out against secret society called IPL

"You would end up with SRK as BCCI president" - Shishir Hattangadi

Sunday Guardian

Former Mumbai cricket captain Shishir Hattangadi is unique in manyways that he served as director-cricket operations and head of cricketoperations for two different franchises - Mumbai Indians and DeccanChargers - in the first two seasons. He saw the innards of thefunctioning of the secret society called IPL at extremely closequarters. In an extensive conversation with Sandeep Bamzai, he nowblows the lid on the lack of transparency and disclosure which doggedIPL and its franchises leading to the current imbroglio. Excerpts:
*What was the problem within the IPL, how did it function say at thefranchise level?
Let us understand the nature of the beast, it was a franchise led IPL.For without the franchisees, there was no IPL. So, the interfacebetween the franchise owners and IPL Commissioner lalit Modi was oneon one and hence secretive without information percolating down atall. The owners had been roped in on a certain premise, based oncomplete confidentiality and lack of disclosure. What did come out inpublic domain was profit share from central pool, revenue model; butthat is just about it. Decisions were made without so much as a byyour leave. For instance retention of players, payments to players;the legal department handled contracts and it was a tripartite axisfeaturing owner, player and the legal cell. We were never toldanything.
Remember that the franchisees also were new to this business. Mythinking as an owner would be - I have this property, it is my domainand I choose to handle it my way - the way Sinatra sang: I will do itmy way. Transparency has now come through a simple tweet. Let us givelalit Modi his due, in many ways it is like KBC with Amitabh Bachchan.When the pilot was made and taken to media buyers, they actually saidno initially. But Star was convinced that they had a winner and theywent with it making history in the process. Modi too believed in theproperty and it rocked.
*Then why so much secrecy...
Lalit Modi was a nobody 10 years ago, he has been created by the BCCIand media. If Subhash Chandra failed, then it is because the BCCI didnot give him official sanction. My fear is that with IPL being drilledinto our heads, the younger players will be convinced to foregoeverything for the IPL. For them IPL colours will become moreimportant than even state and national colours. It is successful, butit has sleaze. Modi ran a secret society aided and abetted by thefranchise owners.There was never any clarity on any of the contracts or tenders. It wasall shrouded in secrecy.
*Do you then fear the complete corporatisation of the game in theyears to come, that the administrators would be replaced by teamowners who would run the game and the board?
That is most worrying. You have hit the nail on the head. A corporatetakeover was on the cards. From the standpoint of vaulting ambition,viewership, popularity, sponsorships and advertising, this was clearlythe design. Corporatising the game and taking over it completely. Butthis is sacrilege, you cannot run sport or cricket on the basis ofreturn on investment (ROI). If thsat becomes the underpiining ethos,then sport as a concept dies.
There would come a time when state associations would have beendissolved and Mumbai Indians would take over MCA, Chennai Super Kingswould take over TNCA and KKR would run CAB. If this had been allowedto happen, there would be a lot of compromises. The edifice of theBCCI functions on the back of its vote bank. Thirty odd associationscontrol the board and the game. Five years down the line IPL wouldbecome the crowning glory of the domestic season. Already we saw thisenvelope being pushed - Deodhar Trophy was discarded for somethingcalled Corporate Trophy. The nexus between board satraps, marketersand broadcasters is the biggest bugbear. You would probably end upwith Shahrukh Khan as BCCI president. I am okay with that as long ashe can run cricket in India ethically and with accountability, butdoes he have the time to do that or the necessary bandwidth.
*So, what do you reckon has suddenly gone wrong with the script?
The all izz well phenomenon has been punctured. It lloked well at thesurface, underneath there was a festering sore. Yes, there wasvisibility, money, glamour; so no questions were asked. Media too keptmum, some big media even supporting the Modi cult aggressively. It wasthe great Indian cash cow. Nobody was willing to take a sneak peakbehind the dark, black curtain. The Governing Council kept quiet, theBCCI too.
Lalit has put his foot in his mouth and unleashed dominoes which haveborught the whole card house down. As a cricketer who put a value onthe cap that I wore, I am pained at the taint and shame, there is somuch mud and grime tumbling out. The world must be laughing at us.Cricket had become a vehicle for commerce, somewhere one needs to drawthe line between commerce and cricket. The boy's club has been thrownwide open and I am telling you this is not the end of it.The train ishurtling out of control to its doom.

Is SC the instrumentality?

All eyes on SC

Sunday Guradian

> A decision by the Supreme Court on a petition filed by former BCCI president> A.C. Muthiah on Friday could lead to an independent probe under the aegis of> the Court. The prospect has sent shivers down the already trembling spines> of franchise owners and their political patrons.>> Muthiah has challenged the norms that permit an office-bearer of the BCCI to> hold a franchise and demanded an independent probe into "conflict of> interest." His specific target is N. Srinivasan, BCCI secretary, who owns> Chennai Super Kings. If the court gives an adverse remark on BCCI> functionaries doubling up as IPL beneficiaries, it could become a> game-changer.>> It will be possible for BCCI to initiate proceedings against Lalit Modi only> after hearing what the Court has to say. The original salvage idea, to> replace Modi with a three-member trustee body headed by Ravi Shastri and> register IPL as a non-profit organisation, has been put on hold.>> The BCCI meeting scheduled for tomorrow has run into a further hurdle.> Monday proceedings in Parliament are expected to be volatile, with the> Opposition gearing up to challenge the government over the secret tapping of> politicians' telephones. This will require the presence of Sharad Pawar,> Farooq Abdullah and Arun Jaitley in Delhi. A high powered BCCI jaw jaw to formalise strategy took place in Mumbai on Saturday.

Modi resurrects Pink City in RIL avatar

IMG-MODI-RIL

Sunday Guardian

IPL Commissioner Lalit Modi and Mumbai Indians franchise owner Mukesh Ambani have a common fascination for the international sports company IMG. IMG has inked a joint venture with Reliance Foundation to build sporting competencies through academies and events, other than IPL, in India. Modi had the same idea four years ago, with the same partner, but could not implement it.
Mumbai Indians, heavily backed to win IPL this evening, are owned by IndiaWin Sports, a part of the Reliance Industries empire. Modi, in a cosy deal, has made inordinately high payments to IMG for its organising role in IPL events, for which he was castigated severely by the BCCI working committee. Modi was rescued at this meeting by his mentor Sharad Pawar.
When Modi was under severe pressure this week to quit so that BCCI could cover its tracks and pretend to clean up with the help of a new committee, he called on Mukesh Ambani and asked the latter to help him survive.
Modi's relationship with IMG goes back a long way. Modi was widely reputed to be the power behind the throne in Jaipur when Ms Vasundhara Raje was chief minister. At that time he promoted Pink City Sports Complex Ltd and signed a significant deal with IMG in 2006 in which Pink City would pay $312,000 per year to IMG for the first ten years. But over 25 years, the amount would extend to Rs 4200 crores at the current exchange rate of Rs 46 to a dollar.
The plan was to garner 1500 acres in Rajasthan using influence, out of which 500 acres would be set aside for IMG academies. IMG would bring international tournaments to India, and Pink City would become the sole and authorised distributor to exclusively sell licensed IMG merchandise in India. Pink City's revenue model was to bring in prestigious academies like Nick Bollettieri and David Leadbetter. The former has produced stars like Pete Sampras, Andre Agassi, Martina Hingis and Venus Williams, which the latter has coached Greg Normal, Nick Faldo and Ernie Els, among others. But, IMG officials have confirmed, this deal was rescinded in 2007 for reasons that were not disclosed. On being contacted IMG's Jim Gallagher said, "Apparently there was a preliminary deal reached but was later rescinded."
According to documents and correspondence (copies of which are with this paper) exchanged between Ted Meekma, senior vice president of IMG, director of IMG Academies and Deepa Raizada, a close associate of Modi, IMG agreed to also set up IMG Soccer Academy, Intrnational Performance Instittue, IMG academies on polo and equestrian sports, shooting, archery and swimming.

High rollers betting on IPL

BETTING ALLEGATIONS SWIRL ABOUT

Sunday Guardian

Tax and Enforcement sleuths are believed to have recovered incriminating computer records during their raids on franchises indicating betting by individuals involved in IPL. This could be linked to match-fixing if owners and their colleagues are involved.
Police have made arrests across India, from Jalandhar to Sirsa to Surajkand to Chattisgarh to smaller towns like Bhavnagar and Rajkot in Gujarat in an effort to curb betting, which has been rampant this season.
Top bookies told the Sunday Guardian, "Is baar satte ka bazaar garam that, achche khaase paisa lagaya gaya hai." He added that interest was high because IPL had returned to India after a sojourn in South Africa last year. It is estimated that around Rs 5000 cr has changed hands in IPL3. Owners like Vijay Mallya and IPL commissioner Lalit Modi have vehemently denied that there is any serious Indian gambling on IPL.
In Britain, where gambling is legal, top online sites are giving odds of 4/5 on Mumbai Indians for an outright win, while Chennai Super Kings is fetching 6/5.
Since betting is illegal in India, bookies are creative. They operate through multiple mobile phones, from vehicles or farmhouses on the outskirts of urban conglomerates. Betting syndicates operating out of small towns in western and central India in the past had links with Dubai and Karachi-based dons.
Betting in the UK has been boosted by the fact that matches have been shown live due to the landmark deal broadcast deal between IPL and ITV. Matches are also being shown on youtube.