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April 27, 2010
Rajasthan Royals today responded to charges raised by BCCI president Shashank Manohar regarding the ownership structure of the IPL franchise by saying the structure has been completely transparent since its inception. Manohar had, at his press conference yesterday, spoken of the confusion over franchisees' identities.
Manohar's point was that one company had won the bid (Emerging Media IPL) and another signed the IPL contract (Jaipur IPL Cricket Private Limited).
In its unsigned statement, released on Tuesday, Rajasthan Royals sought to clarify the issue.
"The Rajasthan Royals franchise bid was successful, with full compliance of BCCI guidelines, in a process conducted with the committee members of BCCI in January 2008," the statement read. "Full details of the consortium bid structure and the way the company would be set up were contained in the original submission to the BCCI in January 2008. The structure has been completely transparent and in accordance with regulatory guidelines ever since.
Shareholders of EM Sporting Holdings Ltd.
"The corporate structure was established in accordance with the details provided in the bid submission shortly after the bid. It was not established prior to the bid, as we obviously did not know if the bid would be successful. Moreover, the time allotted between the Invitation to Tender (27 December 2007), and the bid submission date (23 January 2008), would not have allowed sufficient time to incorporate the intended structure with an Indian entity," the statement read.
"The investors agreed to submit the bid using a consortium, led by UK-based Emerging Media (IPL) Ltd. The other entities in the consortium were disclosed in the bid submission documents. Subsequently, on 8 March 2008, an Indian company Jaipur IPL Cricket Pvt Ltd was incorporated, as detailed in the bid submission. We then executed the franchise agreement on 14 April 2008. The ownership of the consortium did not change between the award of the bid on 23 January 2008 and the signing of the franchise agreement on 14 April 2008."
The statement also sought to clarify the doubts raised by Manohar over the transfer of shares to Shilpa Shetty and her husband Raj Kundra, as well as the alleged non-payment of the 5% commission, due to the IPL, for the transfer of shares. "As part of our strategy to broaden our shareholder base, in February 2009 Kuki Investments Ltd (Raj Kundra and Family) acquired an 11.7% stake in EM Sporting Holdings Limited, the parent company of Jaipur IPL Cricket Pvt. Ltd, which was fully disclosed to the BCCI/IPL," the statement read.
"In February 2009 the Rajasthan Royals contacted the BCCI to agree [on] the precise definition, to agree [on] the amount that needed to be paid, and we are still awaiting a response. For absolute clarity the payment has been fully accrued for within our accounts," the statement read.
Manohar had also said that the governing council was unaware of the identity of two other companies that owned stakes in the franchise - Blue Water Estate and Tresco. In response, the franchise released the share-holding pattern of EM Sporting Holdings Limited, the parent company that owns the team (Refer side-bar). The statement also said the franchise had volunteered to make a full disclosure of its ownership structure through the Indian government's Foreign Investment Promotion Board (FIPB).
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But you can't expect a turnaround unless pitches, umpiring and practice facilities are simultaneously improved