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Government sends BCCI 19 show-cause notices

ESPNcricinfo staff

November 29, 2011

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Lalit Modi watches the opening ceremony, Cape Town, April 18, 2009
Former IPL chairman Lalit Modi was instrumental in shifting the tournament to South Africa in 2009 © Getty Images
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The BCCI has been served with 19 show-cause notices by India's Directorate of Enforcement for alleged violations of the country's Foreign Exchange Management Act [FEMA] totaling approximately Rs 1077.43 crores (US$ 207.52 million), according to a government report investigating the board and its management of the IPL.

The BCCI's alleged violations of the FEMA regulations are believed to have occurred when the BCCI moved the Twenty20 tournament to South Africa in 2009 amid security concerns caused by the holding of India' s national elections at the same time as the IPL.

Speaking in Parliament earlier on Tuesday, Ajay Maken, India's sports minister, said that various government agencies have conducted inquiries into the allegations of irregularities by the BCCI.

These include the FEMA violations totalling Rs 1077.43 crores, Income Tax assessments of Rs.118.04 crores and Rs.257.12 crores for 2007-08 and 2008-09 respectively (total Rs 375.16 crores) as well as the Service Tax department's show cause notices involving an amount of Rs 159.12 crores to various service providers/ stakeholders in relation to the IPL for the recovery of service tax.

The total payments being sought from the BCCI and its stakeholders amounts to more than Rs 1600 crores.

The report states that the Income Tax department has withdrawn the tax exempt status of the board, and claimed back taxes amounting to Rs.118.04 crores and Rs.257.12 crores for the years 2007-08 and 2008-09 respectively. The tax exempt status had been removed because the BCCI had "amended its objects" - that is changed the basic definition of its functioning from June 1, 2006, an act which had required a fresh registration. The change had been noticed only when the BCCI's tax assessment proceedings were being carried out for the year 2007-08. Given that there had been no fresh registration done since the changes, the government had stated that the BCCI's old registration did not survive and neither could its tax exempt status.

Government investigations are also being conducted into "the source of foreign investments in individual teams is being investigated and references through the Foreign Tax Division." The report also stated that "preliminary investigations have shown prima facie evidence of monopolistic nature of working of BCCI and the companies involved" in awarding media rights for the IPL. The Ministry of Corporate Affairs has therefore been instructed to investigate these issues under the provisions of the Competition Act, 2002.

© ESPN Sports Media Ltd.

Posted by vinodpalrvangala on (November 30, 2011, 11:45 GMT)

While I know for sure that BCCI is not the cleanest organization.....why I do I get a feeling that this entire thing is orchestrated by Mr.Maken....this whole affair smells and feels like a witch hunt !!!!!!!!!!!!!!

Posted by India_ANY_track_bully on (November 30, 2011, 6:32 GMT)

"how about the ICC send the BCCI one to show cause why DRS should not be made manadatory with immediate effect!"...

I don't think anyone who read the match referee's reports on couple of recently concluded series w.r.t the different pieces of DRS system used will have any heart to mention DRS again. It's a joke!!

Hot spot goes cold, ball tracking is subject to local TV channel frame rates (no standards!) plus not sure it really works.. and snick-ometer can go AWOL!

Looks like it's only use is to get Dravid out unfairly :-))

Posted by   on (November 30, 2011, 4:56 GMT)

The whole case will be put on to MR. LALITH MODI..!!The best escape BCCI has!! evrytin lalith modi has done that wat they will say!

Posted by Smithie on (November 29, 2011, 20:43 GMT)

And while "show cause "notices are being flung around how about the ICC send the BCCI one to show cause why DRS should not be made manadatory with immediate effect!

Posted by   on (November 29, 2011, 19:40 GMT)

@anoopshameed: Indian cricket team selection is not in the hands of politicos atleast for the last 5 years. @hashabjp & anoopshameed: who would select these people a bill in the parliament should be passed for it, if not caste politics then state politics. Indian cricket has come out of dominance of Mumbai and Karnataka now and we are selecting talent from Bareily also. Please no stateism. @hashabjp: Administration is where u need shrewedness a bit, let the administration be managed by politically correct people, let alone the selection be managed by cricketers. Do you know any cricketer who can manage all the finances of BCCI can be tagged as CFO. if we have to follow you then Indian physio should also have played cricket at some state atleast, then only he would understand the actual pain a cricketer carries when he is hit by a ball or in a cramp.Is i so??? Sachin has never been a good captain. BCCI is professionaly managed company let it be managed departmently and watch good ckt

Posted by SanjivAwesome on (November 29, 2011, 19:39 GMT)

There is some one with the power to hold BCCI accountable afterall.

Posted by Gansmith on (November 29, 2011, 19:07 GMT)

This is awesome! I have been waiting for this to happen since the injustice carried out against the ICL! I hope some serious actions are taken on this issue!

Posted by addiemanav on (November 29, 2011, 19:06 GMT)

WOW!!Now the indian govt wants the bcci to work in a transparent manner!!THATS IRONIC!!

Posted by kribnutz on (November 29, 2011, 18:15 GMT)

The BCCI was acting monopolistically ?!?! Who would have thought....

Posted by AliHaydar on (November 29, 2011, 15:44 GMT)

Oh goodness, Kartik, that is hilarious. What in the world is a "show-case notice?"

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