The IPL Mess January 24, 2011

BCCI controlled IPL 2009 finances

The BCCI had the final say on the management of the IPL's finances when the league was moved to South Africa in 2009, and in some cases framed the plan to be adopted, according to correspondence between the various officials involved. This is contrary to the recently reported deposition of senior board officials, who told a parliamentary committee that is probing the Twenty20 tournament's finances that several transactions were carried out by former IPL chairman Lalit Modi.

Official documents acquired by ESPNcricinfo suggest that the board was not only aware, at the highest levels, of the accounting and financial transactions required to move the event to South Africa, but also played a large role in advising Modi on how to carry them out.

Board president Shashank Manohar, secretary N Srinivasan and current IPL chairman Chirayu Amin recently appeared before the Parliamentary Standing Committee on Finance over allegations of foreign exchange violations related to moving the tournament to South Africa. The parliamentary committee had expressed its opinion that opening and operating a current account in South Africa through an explicit arrangement with Cricket South Africa (CSA) could be construed as violation of the Foreign Exchange Management Act as the BCCI had failed to ask the RBI for permission. The committee also asked the officials about the funding patterns of the IPL and the method of payment of players' salaries.

The board reportedly admitted that mistakes were made, but claimed that certain transactions were carried out by Lalit Modi, then the IPL chairman, and they had simply approved those in good faith. However, documents show the BCCI was involved in managing the IPL's finances every step of the way. At the governing council meeting on March 22, 2009, Manohar stated that the board would open an account of US$ 10 million to cover the expenses of holding the IPL in another country "after seeking clearance from RBI and that the account would be operated by the treasurer MP Pandove."

Once the decision was taken to move the tournament to South Africa, Srinivasan outlined the RBI restrictions on operating an account in a foreign country in a letter dated March 24, 2009 that was sent to Modi and Manohar, and suggested that CSA operate the account under the supervision of the BCCI. "The payments that are made would be monitored by us and would be made after only after ensuring that proper authorisation is received from IPL Chairman and Hon. Secretary, BCCI," Srinivasan says. The letter also states that after the expenses were approved by Modi, they were to be sent to Srinivasan "for final authorisation." Meanwhile, Pandove was to "oversee this operation and will be responsible for reconciliation of the accounts, including tax matters".

The agreement to stage the IPL in South Africa was then signed with Cricket South Africa on March 30, 2009 by Srinivasan. Subsequently, a number of emails were sent by Prasanna Kannan, the IPL's chief financial officer, detailing the transactions that had been carried out and the various tax concerns arising out of hosting the tournament abroad. In an email dated April 3 that was sent to Modi, Srinivasan and Pandove, among others, Kannan outlines a discussion with the South African Revenue Services (SARS). SARS requires 15% of the players' fees to be paid as withholding tax, and in another email dated April 9 sent by the board's internal auditor, the BCCI states that it "will help the franchises in fulfilling these obligations and pay the withholding tax in South Africa."

Another email dated April 10 lays out the amount of money that had been dispersed to each team up to that point and how much was still left in the bank. In the same email, Kannan asks the secretary and treasurer "to approve a further transfer of US$ 10 million to CSA". The documents make it clear that the BCCI was not only involved in the decision-making process, but was overseeing it as well.

The 2009 IPL was moved at the last minute over security concerns arising out of the tournament overlapping with the Indian general elections.

Tariq Engineer is a senior sub-editor at Cricinfo

Comments have now been closed for this article

  • sonofchennai on January 25, 2011, 7:09 GMT

    None of these fellows are scrupulous....Modi made some big money without sharing the spoils with Srinivasan and Manohar..These so called gentlemen then started the allegations and ousted Modi...

  • vakkaraju on January 25, 2011, 3:06 GMT

    Seems as though BCCI just wanted to curb Modi as he was getting too popular. All the accusations and drama were a result of envy, pure and simple. This is the first time they have been caught. Now we can begin the real process of cleansing.

  • on January 24, 2011, 16:36 GMT

    Wow, finally the truth comes out. Modi perfect man to run the IPL.

  • sonofchennai on January 25, 2011, 7:09 GMT

    None of these fellows are scrupulous....Modi made some big money without sharing the spoils with Srinivasan and Manohar..These so called gentlemen then started the allegations and ousted Modi...

  • vakkaraju on January 25, 2011, 3:06 GMT

    Seems as though BCCI just wanted to curb Modi as he was getting too popular. All the accusations and drama were a result of envy, pure and simple. This is the first time they have been caught. Now we can begin the real process of cleansing.

  • on January 24, 2011, 16:36 GMT

    Wow, finally the truth comes out. Modi perfect man to run the IPL.

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  • on January 24, 2011, 16:36 GMT

    Wow, finally the truth comes out. Modi perfect man to run the IPL.

  • vakkaraju on January 25, 2011, 3:06 GMT

    Seems as though BCCI just wanted to curb Modi as he was getting too popular. All the accusations and drama were a result of envy, pure and simple. This is the first time they have been caught. Now we can begin the real process of cleansing.

  • sonofchennai on January 25, 2011, 7:09 GMT

    None of these fellows are scrupulous....Modi made some big money without sharing the spoils with Srinivasan and Manohar..These so called gentlemen then started the allegations and ousted Modi...