In June 2008, less than a fortnight after the Rajasthan Royals had defeated the Chennai Super Kings in the first Indian Premier League final, Sir Allen Stanford landed his helicopter on the Lord’s outfield. At a press conference to announce cricket’s richest one-off match, he was flanked by two other knights, Vivian Richards and Ian Botham. As the Texan billionaire spoke of how he found Test matches boring, at a venue considered the home of cricket, there was not even a murmur of dissent.
More than two years later, the Stanford Series is history and the man himself is prisoner #35017-183 at the Federal Detention Center in Houston. He goes on trial for fraud in January 2011. The IPL is still around, but by then some of the main players could be in the courts themselves, asked to explain a corruption scandal that is almost labyrinthine in its complexity.
Whatever Stanford did, Lalit Modi tried to outdo. At the IPL players auction in Goa in February 2009—when he famously declared the league recession-proof—Modi attended press briefings flanked by the likes of Preity Zinta and Shilpa Shetty. The message was clear. ‘You can have your has-been cricketers. I have my Bollywood glamour.’ One man behind bars, the other for all intents and purposes on the run. The bigger the ego, the swifter the pinprick that sends all that hot air gushing out of the balloon. Stanford’s baby didn’t see a second birthday. What will happen to Modi’s child?
The immediate future is shrouded in uncertainty. The decision to expel the Royals and the Mohali-based Kings XI Punjab has shaken the League to its foundations, and left other franchise owners looking nervously over their well-padded shoulders. Those shown the door are talking of legal action, but the board is confident that their case is watertight.
How did it come to this, especially for a franchise like the Royals who were planning to go global as recently as last February? Modi’s ouster in April, for ill-advised tweets about the nascent Kochi franchise and Shashi Tharoor, then India’s minister of state for external affairs, put everyone under his umbrella at risk. And sure enough, it’s the two teams that had the closest ties with Modi that have felt the BCCI’s wrath.
In the board’s defence, it can be argued that both the Royals and Kings XI have taken the fall for procedural flaws that date back to the time when they made successful bids.
The fact that the two cities became part of the IPL was a surprise in itself. Ahmedabad, an established Test venue, and Nagpur, one of the power centres of Indian cricket, were expected to get teams, but his critics allege that Modi fixed the auction so that his friends and family could get teams on the cheap.
A cursory look at the numbers supports that argument. Reliance paid $112.9 million for Mumbai Indians, the UB Group $111.6 for Royal Challengers Bangalore, and Deccan Chronicle $107 million for Deccan Chargers. By contrast, the Royals cost just $67 million and Kings XI, $76 million.
Why did it take so long for the teams to be thrown out, and why weren’t such irregularities discovered earlier?
Ravi Shastri, part of the IPL’s governing council, says that the scam would not have come to light if not for investigations carried out by the Income Tax Department and the Enforcement Directorate (ED) in the wake of Modi’s suspension. According to him, throwing out the two teams was prompted by legal advice. “This can’t even be called a BCCI decision,” he says. “The lawyers they consulted were scathing. And if you want to clean up the IPL and restore its credibility, it has to be done now. You can’t wait two or three years for it.”
While Shastri claims that Sony, who have the broadcast rights, are perfectly happy with eight teams, an IPL insider says that it’s only a matter of time before two new entities come into the picture. “If not now, then before the 2012 season, there will be a tender for two new teams,” he says. “Remember that this is how the BCCI makes money. Pune and Kochi got them $700 million. It’s perhaps no coincidence that it’s two of the cheapest teams that have been elbowed out. You can be sure that they’ll get a lot more than $143 million for two new franchises.
“The deal signed with Sony was always on the understanding that the league would expand to 10 teams after the third season. That will happen. The board cannot afford to take a loss.”
The ED investigations that started in late April not only pointed the finger at the BCCI for foreign exchange violations, but also shone a light on the financial irregularities within the IPL. According to one insider, the papers that the ED has are the board’s trump card. “You can see that from the statements made by Kings XI and the Royals,” he says. “Neither has been aggressive. Both have stressed the need for negotiation.”
In the case of the Royals, you could say that they started off on the wrong foot. The original bid document was signed by Manoj Badale on behalf of Emerging Media (IPL) Ltd, based in the UK. But by the time the franchise agreement was signed in March 2008, the shares were held by Fraser Castellino and Ranjit Barthakur, on behalf of Jaipur IPL Cricket Pvt Ltd. This was a clear violation of the tender process, says BCCI.
It only got worse. Despite the franchise agreement saying that there could be no change of control for three years, Rajasthan altered its ownership pattern twice during that period. Following Modi’s exit, the board’s own investigation found that Emerging Media had no shares in Jaipur IPL Cricket Pvt Ltd. In March 2008, Castellino transferred half the 10,000 shares to a Mauritius-based company, EM Sporting Holdings Ltd. Barthakur tranferred 4,999 shares to the same entity in January 2009, passing on one share to Emerging Media (IPL) Ltd in the UK.
The Kings XI web is almost as tangled. When the initial bid was made, Preity Zinta was chairperson of KPH Dream Cricket Pvt Ltd. However, the shares were held by Mohit Burman, whose brother Gaurav Burman is married to Lalit Modi’s stepdaughter, and ACEE Enterprises Pvt Ltd. Again, a violation of the tender process.
Kings XI too played around with its ownership structure before it was supposed to. In May 2008, the owners transferred shares to Windy Investments Ltd and Dabur Investment Corporation Ltd. But by June, the Dabur-Windy stake had dropped to 23 per cent, with Ness Wadia, Karan Paul, Colway Investments, Root Invest Pvt Ltd and Zinta sharing the rest.
The Modi link was most obvious in Jaipur, where Suresh Chellaram, his brother-in-law, had a 44 per cent stake. Once Modi was ejected from the scene, it became apparent that the new dispensation couldn’t allow someone close to him to have that kind of influence.
Many have suggested that the two teams have also been penalised harshly for being on the wrong side of the Congress-BJP divide. “Why weren’t the [Kolkata] Knight Riders picked on, despite having the same kind of ownership issues?” asks an individual connected with another IPL franchise. “They too were linked with Modi.”
According to the insider, the Kolkata Knight Riders and Kochi franchise escaped because of the right connections. Shah Rukh Khan, one of KKR’s owners, is known to be close to the Nehru-Gandhis, while Shashi Tharoor, despite having lost his ministerial berth, supported the Kochi cause.
Talk of intrigue in the corridors of power spices up a story, but in reality this was a BCCI decision. Of course, the politics hasn’t helped the Royals. As soon as a Congress government replaced Vasundhara Raje in December 2008, it became apparent that they didn’t really want the team there. It was after all a Modi creation, and Modi’s links to the former Chief Minister were scarcely a secret.
“The political big-shots are not bothered about Modi,” says the insider. “If they were, they would easily have fixed him by now. It’s [Sharad] Pawar that the Congress wants under its thumb.”
Fans of the two franchises who expect them to be back in the fray after a court battle would do well not to be hopeful. “The chances of these teams coming back are next to zero,” says the insider. “No stay order will affect the tournament. The franchises know that they’re on a sticky wicket legally. The board has taken the best legal advice possible.”
“Shashank Manohar and Arun Jaitley—both of whom are lawyers—discussed this at length with Goolam Vahanvati, the attorney general, before arriving at this decision. When the board decided to withdraw the civil action against Jagmohan Dalmiya, it was Soli Sorabjee who guided them. These men are not fools. They would not act without proper advice.”
For the moment, little is being said about the conflict-of-interest issues at the heart of the board. N Srinivasan, its president- elect, wears so many hats that Edward De Bono would be proud. But just as they were once blind to Modi’s actions, there’s now an eerie silence when it comes to the Chennai Super Kings.
After the auction, when India Cements won the rights to the franchise, Modi described Srinivasan as “just a shareholder”. With most of the media contingent being sports journalists, no one knew enough to ask why his family then owned 51 per cent of the company. The selective blindness and deafness didn’t end there. In May 2008, Indian Express published an article titled ‘Indian Parivar League’ that highlighted the extent to which cronyism had crept in. “Of course, Suresh Chellaram is Lalit Modi’s brother- in-law, but that doesn’t mean anything,” BCCI Secretary Niranjan Shah said, “there is no conflict of interest.”
It’s become common to think that Modi’s Twitter excesses cost him his kingdom. But did it really? “Yes, and no,” says the insider. “They were on to Modi anyway. Even if he had survived IPL 3, he wouldn’t have made it to season four.”
Modi’s protestations of vendetta aside, twitterspace has been abuzz since the two teams were thrown out. The emotional messages sent from various BlackBerrys and smart phones have become stories in themselves. ‘They are hell bent on destroying something that we as Indians are proud of—the IPL. So as to satisfy there personal Agendas,’ keyed in Modi, proving that you don’t need to know how to spell to run a multi-million-dollar league.
‘I wonder if IPL franchisees r serious stakeholders whose investments n participation r respected or r they slaves who only come n play ?’ tweeted Vijay Mallya, who went on to add: “This is down right ridiculous and raises serious questions on the attitude of the BCCI towards IPL franchisees.”
Having taken Modi down, the BCCI is in no mood to take criticism from others. After Mallya’s tweets, a member of the Royal Challengers organisation received a text message that said: ‘As we have been saying. Please align yourself with us. Or everyone will get the same taste of the medicine we have given today to RR and Kxip. Owners should not think they are above the Bcci.’ That wasn’t all. A follow-up, copied to another franchise as well, went on to say: ‘You should be happy we allow you to participate. We know how to clip your wings. President and I have decided we will run the IPL the way we want to and after all it’s our property. You can either be a part of it or we can find a way for you to get out. We will throw Lalit Modi and anyone attached with him. So best avoid talking to him.’
The franchises claim that the text messages came from Srinivasan’s phone. The board took such umbrage that Ratnakar Shetty, the chief administrative officer of BCCI, sent out a press release. ‘The Board would like to clarify that no such messages have been sent from his mobile,’ the release said. ‘This is clearly a case of foul play, and complaints to that effect are being lodged with the concerned Mobile phone service, and the Police, for immediate action.’
During the first season of the IPL, when many in the media were waving the flag and tom-tomming the IPL’s greatness, Sharda Ugra, one of the old school, wrote scathingly about the playground of rich egos: ‘This is what the tradition-defying, benchmark-setting, watershed-creating, ratings-busting, Indian Premier League is actually all about: before the cricket, before the market, before entertainment, it is about the big businessman’s bonechina- brittle ego.’
The Stanford show fell apart like Humpty Dumpty. Its Indian cousin is more resilient, but the cracks are beginning to show. “There’s no doubt the IPL will take a hit,” says Ravi Shastri. “But Manohar is the man to fix it. In the long run, it will survive and thrive if it’s clean and transparent.”