India Cements shareholders to get CSK shares

The board of India Cements, the company which owns Chennai Super Kings, has approved the transfer of ownership rights to the franchise to its newly formed subsidiary, Chennai Super Kings Cricket Ltd. According to a report in the Hindu, under the new structure, shareholders of India Cements will be given the shares of Chennai Super Kings Cricket Ltd, meaning the franchise will be owned by the shareholders. India Cements had decided to demerge the IPL franchise to a wholly-owned subsidiary in September last year.

The shareholders will be allowed to choose whether they want to own only India Cements shares, Chennai Super Kings Cricket Ltd shares, or both. Srinivasan did not specify who would head the new company, though. Those who choose to own CSK shares will be given a percentage of shares equivalent to their stake in India Cements. Srinivasan and his family hold 28.23% of India Cements' shares.

"This is the first step to slowly getting India Cements into a pure-play cement company," N Srinivasan, the vice-chairman and managing director of the company and sidelined BCCI president, said after the India Cements board met in Chennai on Wednesday, the Hindu reported. "The ownership of Chennai Super Kings Cricket Ltd will go to shareholders."

The move is significant, given the Supreme Court's directive on January 22 that struck down the controversial amendment to the BCCI constitution's clause 6.2.4 that allowed board officials to have a commercial interest in the IPL and the Champions League T20. The rule was amended in September 2008, six months after the Chennai franchise was sold to the-then BCCI secretary N Srinivasan's India Cements.

The India Cements board has not yet approached the BCCI with its decision to rearrange CSK's ownership pattern. Its decision is pending due approvals.

Even if cleared by the BCCI, however, it is still not clear if it would affect the court's directives on Srinivasan at all - on the court's word Srinivasan was sidelined as BCCI president last year due to the evident conflict of interest issues between his roles in the BCCI and India Cements, and in its January order the court had barred him from contesting in the BCCI elections until he gave up his commercial interest in CSK.

However, the order had also suggested that even after shedding his commercial interests in any BCCI event, the concerned person may still have to wait for a committee led by former Chief Justice of India RM Lodha to consider his liability in the matter and "award a suitable punishment".