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Retrofit: The IPL mess - Whose responsibility is it anyways?

Guest Column
Retrofit: The IPL mess - Whose responsibility is it anyways?

Author | Sandeep Bamzai | Wednesday, Apr 28,2010 8:33 AM

Guest Column<br>Retrofit: The IPL mess - Whose responsibility is it anyways?

Individual versus collective? That is the question I am asking today. Whose responsibility is it when the fur starts flying in any enterprise engaged in commerce? Who takes the rap? Who carries the can for financial defalcation or other misdemeanours? For the BCCI’s current travails, one doesn’t need to rewind too far back into the past. Take the Satyam case. It is the best analogous reference point for the BCCI set of problems. 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 in this case was the board of directors comprising many eminents. They were guilty because there was collusive intent. They turned a blind eye to Raju’s misdeeds and brazen appropriation of shareholder wealth.

Prof M Rammohan Rao, Dean of Indian School of Business, management professor from the Harvard Business School (HBS), Prof Krishna Palepu; a former Director of two IITs, Prof VS Raju; former Union Cabinet Secretary, TR Prasad, and the father of Pentium chip, Vinod Dham, were on the board of Satyam and they failed to protect shareholder wealth from being destroyed. They enjoyed the benefits and perks of independent directorship, but they failed to oversee the company going on skid row. Ergo, they were equally responsible for Satyam’s demolition. The Government, however, stepped in and proactively tried its best to salvage the beleaguered company. A committee consisting of Deepak Parekh, Kiran Karnik and C Achutan made up the transition team till such time as Tech Mahindra bought it outright. It was an efficiently managed operation without jeopardizing the careers of its many thousands of employees or its business interests. The fact that a squeaky clean Anand Mahindra stepped in to arrest the decline worked in its favour. The faith in the tenets of corporate governance had been restored and a company virtually on life support had been saved. And now turned around.

Cut to the Indian Premier League, a sub-committee of the Board of Control for Cricket in India (BCCI), for long a commercial enterprise masquerading as a not for profit and non-transparent organisation. The Governing Council had several members of the BCCI, all ex-officio office bearers and hence, above suspicion like Casear’s wife. The GC also had three top Indian cricketers – Sunil Gavaskar, Ravi Shastri and Mansur Ali Khan Pataudi. All of them reportedly did not have a clue as to what broth Chairman and Commissioner Lalit Modi was cooking. BCCI President Shashank Manohar is an honourable man, completely clean, but his explanation that Modi did pretty much as he pleased does not wash. All 13 GC members are equally culpable. If you know that there was a fiddle in the Rajasthan Royals and Kings XI Punjab shareholding and that Jai Mehta surfaced as an investor in KKR in 2009, then what were you doing when IPL was being architected? Were you deep in the arms of Morpheus or did you choose to ignore Modi’s unilateralism because he was making money in spades for the BCCI? This shocking apathy to follow transparency and corporate governance norms has been dogging BCCI for years. Now, it has blown up in their faces.

From the time that IPL came into being, BCCI’s character and hue has undergone a radical metamorphosis. It is now being viewed as an association of persons by the Finance Ministry’s Revenue Department and not a non-profit organisation registered under the Tamil Nadu Societies Act. As a BCCI sub-committee, it is nothing more than a wholly-owned subsidiary of the body corporate called BCCI. IPL has changed the underlying credo with which BCCI was formed and functioned till 2008. It is now a purely commercial enterprise engaged in business and commerce. It has dealings with broadcasters, advertisers, sponsors and can be hauled over hot coals for non-payment of tax deducted at source for players, referees, coaches and support staff; service tax 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 net in 2008 by the Central Board of Direct Taxes (CBDT). BCCI is contesting a contention by the income-tax authorities that the Board not be categorised a not for profit organisation tag that allows it to avail a tax exemption. The Budget 2009-10 had also made changes in the definition of “charitable purpose” to ensure that entities operating on commercial lines do not claim income-tax exemption. The Section 2(15) of the Income Tax Act defines “charitable purpose” to include relief for poor, education, medical relief, and the advancement of any other object of general public utility. The Board has appealed to the Income-Tax Appellate Tribunal against the decision of Mumbai tax authorities and is yet to make a fresh application to the local tax authority 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 in history now. The individual Modi is taking the rap. Yes, he was arrogant. Yes, he rode roughshod over everyone and conducted business in an extremely secretive manner. Equally important is the fact that a cabal consisting Manohar, secretary N Srinivasan, IPL GC vice chairman Niranjan Shah and GC member Rajiv Shukla had been trying to oust Modi from the IPL or at least reduce his clout, but Modi had smartly ringfenced himself by keeping his benefactor Sharad Pawar in his corner. But when the heat got to Pawar and his 2-I-C Praful Patel, it got uncomfortable. The secret society called IPL functioned like an old boy’s club. Every member of the family was taken care of. N Srinivasan, who was board treasurer in 2008, actually got a franchise, Sunny Gavaskar and Ravi Shastri, who were employed by ESPN Star Sports got hefty $1 million contracts from the BCCI, Rajiv Shukla is a beneficiary of equity from KKR franchise owners Shah Rukh Khan in his company BAG Films, and so it carried on. You scratch my back, I will scratch yours as crony capitalism, or in this case, crony sportism took a garrote like grip on the enterprise.

The opacity in IPL was even more severe than Satyam. Nothing and nobody was allowed in. Now when Manohar says contracts were signed and then presented to the GC in a fait accompli sort of manner, why didn’t anyone blow the whistle? Well, you can guess why? Comfort level. Yes, everyone was sanguine. Now that the can of worms has been thrown open for the world to see and examine, the BCCI chooses to distance itself from the mess. Sorry, the hoi polloi are not willing to buy this argument. Even if they were to accept that Modi was a flamboyant crook, they reckon that the BCCI is equally guilty. In the dock is the BCCI and its so-called autonomous nature. But the nature of the beast has changed and the Government has got its toe in the door. As the door lies ajar and the Government’s roving inquiry opens it that much more easily, each one of us is looking for some sort of accountability from the body that runs cricket. My fear is that now that Modi has been sacrificed as part of the eye for eye pact with the Government, the wolves should not be called off and the BCCI should not be allowed to carry on as it wishes. The BCCI needs to be accountable and Modi should be made a victim. All eyes are on former BCCI president AC Muthiah’s challenge in the Supreme Court on ‘conflict of interest’, which essentially targets Srinivasan. The Apex Court should also look at the larger issue of governance within the BCCI.

Three Faux Pas

• ET’s screaming lead that Home Minister P Chidambaram has been asked by the PM to head the roving investigation into IPL. Response came from the venerable Finance Minister Pranab Mukherjee in his Parliament House office, where he shouted at journos to get out of his room – all you need is a pen and paper to carry out your scurrilous writings, did anyone check with the PM, HM or me before writing this nonsense? That is as conclusive a denial as any.

• ToI’s big bang exclusive on page 1 saying that WSG MD Venu Nair had broken down during interrogation and accepted that a facilitation fee, sorry a bribe of $80 million, had been paid at the time of renegotiating the IPL broadcast contract. The story had three bylines. Meanwhile, ET the same day had a diametrically different story on the same WSG-Venu Nair affair. The following day, WSG sent in a very strong denial saying that the ToI story was hogwash.

• Finally, a bellicose Times Now went to town saying that as many as 27 players had been indicted for match fixing by IT authorities in the 2009 season. This was a bombshell and everyone covering the IPL imbroglio, including this writer, was in a state of shock. Minutes later came a strong government denial that there was no truth in this.

(Sandeep Bamzai is a well-known journalist, who started his career as a stringer with The Statesman in Kolkata in 1984. He has held senior editorial positions in some of the biggest media houses in three different cities - Kolkata, Mumbai and New Delhi. In late 2008, he joined three old friends to launch a start-up – Sportzpower Network – which combines his two passions of business and sport. Familiar with all four media – print, television, Internet and radio, Bamzai is the author of three different books on cricket and Kashmir.

The views expressed here are of the writer’s and not those of the editors and publisher of

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