March 28, 2014

Indian cricket's conflict-of-interest problem

The amendment that exempted the IPL from the conflict-of-interest clause is the root of the current crisis, leading to Srinivasan's fall, and damaging cricket's credibility

N Srinivasan and other men in responsible positions in Indian cricket don't seem to realise that the conflict-of-interest principle is meant to protect their reputation and integrity © BCCI

Earlier this week, the Supreme Court told lawyers representing the BCCI that if the board's president, N Srinivasan, didn't step down from his post voluntarily, the court would pass orders compelling him to step down. The court went further; it declared that it was "nauseating" that Srinivasan was still in office. It didn't stop there; referring to the earlier inquiry commissioned by the BCCI into the scandal (conducted by two retired judges of the Madras High Court), the court asked rhetorically, "Can we say that the probe report was managed, and if we say so, then what will be the consequences?"

The uncompromising "go, or else" tone, the unusually strong language, and the startling suggestion of impropriety, seemed to spring from the bench's exasperation with Srinivasan's refusal to step aside as president for the duration of the investigation. The judges believed that the investigation into the fixing and betting scandal involving Srinivasan's IPL club franchise, Chennai Super Kings, and his son-in-law, Gurunath Meiyappan, couldn't be conducted fairly while he remained in office.

The story of the CSK scandal has been the chronicle of a fall foretold. If the Supreme Court had intervened decisively a few years ago, there might not have been a scandal at all. The large reason why matters came to this pass is this: Indians have the greatest difficulty in agreeing upon what constitutes a conflict of interest.

The squalid sequence of events that culminated in the CSK scandal was set in motion, ironically, when the BCCI decided to amend an excellent provision in its constitution expressly intended to insulate board officials from conflicts of interest. The clause laid down that "no administrator shall have, directly or indirectly, any commercial interest in the matches and events conducted by the Board". The amended version specifically excluded the IPL, the Champions League and T20 cricket.

This amendment was passed retrospectively, eight months after the inaugural bidding for the IPL franchises, to regularise Srinivasan's ownership of the CSK franchise. When AC Muthiah, a former president of the BCCI, moved the Supreme Court arguing that an administrator of the cricket board shouldn't be allowed to own an IPL franchise because of the obvious conflict of interest, a two-judge bench of the Supreme Court delivered a split verdict. This meant that till the matter was resolved by a larger bench of the court, Srinivasan was free to simultaneously own CSK and function as president of the BCCI.

Justice JM Panchal was one of the judges on the two-judge bench that delivered the split verdict. His reasons for rejecting Muthiah's petition are instructive. He ruled that no conflict of interest existed because a) no member of the BCCI, or other franchisee, had objected to the amendment b) the rules were framed long before the IPL was conceived of and therefore didn't apply and c) the BCCI had suffered no financial loss because of the "so-called conflict of interest".

To judge the force of Justice Panchal's arguments, we need a working definition of "conflict of interest". The standard definition, cited by Wikipedia, goes like this: "A conflict of interest is a set of circumstances that creates a risk that professional judgement or actions regarding a primary interest will be unduly influenced by a secondary interest."

Good rules - like the conflict-of-interest clause - help organisations achieve ethical outcomes without the need for individual heroism

By the terms of this definition it seems plain that Srinivasan's position as the treasurer of the BCCI at the time when franchises were allotted created a clear conflict of interest, because, as a BCCI official, he would be involved in administering a tournament in which he owned a franchise. The fact that the IPL didn't exist when the BCCI's conflict-of-interest rules were framed should have had no bearing on their applicability to the tournament. The whole point of having written rules is to lay down principles that allow an organisation to negotiate novel circumstances in an ethical way. You could even argue that the framers of the rule that Srinivasan had amended were prescient, because they anticipated an IPL-like circumstance and sought to forestall it.

The absence of objections from other franchisees or members of the BCCI should have made no difference to the application of the principle. A circumstance that creates a conflict of interest exists independently of the opinions or responses of people who might be affected by it. A bunch of franchisees keen to feed at the IPL trough weren't likely to antagonise a powerful BCCI official determined to own a franchise. Good rules - like the conflict-of-interest clause - help organisations achieve ethical outcomes without the need for individual heroism.

Justice Panchal's third reason for dismissing Muthiah's petition was that Srinivasan's dual role hadn't caused the board any financial loss. This conviction that a conflict-of-interest objection is valid only if that conflict of interest has caused actual material harm is widespread. It is also, I think, misplaced. As the Wikipedia entry on the subject goes on to say, "[t]he presence of a conflict of interest is independent of the occurrence of impropriety. Therefore, a conflict of interest can be discovered and voluntarily defused before any corruption occurs" (emphasis added).

The reason the Supreme Court should have upheld Muthiah's objection is not because Srinivasan's double role as administrator and franchisee had caused the BCCI any harm at the time but precisely to ensure that it didn't harm the BCCI in the future. The risk of wrongdoing, the fact that conflicting interests can potentially corrupt motivation, should have been reason enough to force Srinivasan to choose between being a franchisee or a board official. The split verdict saw the case referred to a larger bench and in the interim Srinivasan rose to become president of the board. The rest is history.

The tendency to dismiss conflict-of-interest charges while indignantly waving the standard of personal integrity is epidemic in Indian cricket. Thus Kris Srikkanth saw no difficulty in simultaneously being the chief selector of the national team and the brand ambassador of Chennai Super Kings; Anil Kumble was comfortable with being the chairman of the National Cricket Academy, the president of the KSCA and the director of a player-management company; and MS Dhoni, India's captain in all three formats of the game, was briefly a shareholder in a player-management firm called Rhiti Sports that counted RP Singh and Suresh Raina amongst its clients.

These are intelligent, successful men who seem to view the conflict-of-interest caution as an allegation of corruption, when it is, in fact, a principle intended to safeguard their reputation and integrity. This isn't surprising: people take their cues from the men at the top and the BCCI's president isn't just the supremo of Indian cricket and the owner of Chennai Super Kings, he is about to become the chairman of the ICC. If Srinivasan's colossal conflict of interest could be retrospectively legitimised and glossed over by the BCCI without swift corrective action by the courts, why should anyone involved in Indian cricket declare a pecuniary interest for the sake of transparency, or recuse himself from situations that create a conflict of interest?

Now that the Supreme Court, spurred on by the Justice Mudgal report, has brusquely declared that Srinivasan's presidency can't be reconciled with a fair investigation of the CSK scandal, the scandal begins to seem like a cautionary tale. Instead of talking about the potential for wrongdoing created by Srinivasan's conflict of interest and trying to forestall it, the courts and the police are now dealing with allegations of actual wrongdoing. The amendment that gelded the conflict-of-interest clause by exempting the IPL was the original sin: it led directly to Srinivasan's fall and it is responsible for the collateral damage to cricket's credibility.

Will the example of the apex court encourage Indian cricket's many publicists to press for a reinstatement of the original clause? Will it help them speak truth to power? I wouldn't hold my breath. Lalit Modi's downfall didn't reform the BCCI: its publicists and clients switched their loyalties to Srinivasan without missing a beat. Conflicts of interest can be fixed; servility is a permanent condition.

Mukul Kesavan is a writer based in New Delhi
This article was first published in the Kolkata Telegraph

Comments have now been closed for this article

  • Box on March 29, 2014, 8:38 GMT

    This is indeed a very good article from Mukul. India counts cricket fans in the millions. Someone has to fight to ensure that fairness exists. It behooves ESPNCricinfo as well as all cricket journalists to examine such wrong doings in cricket.

    Various boards can come up with objections and move the courts. But often people are worried about consequences. Hence it is important for ESPNCricinfo to safeguard the interests of the public and be bold and move the courts. If you write articles, it raises awareness but after the initial controversy, it is business as usual.

  • Dummy4 on March 29, 2014, 6:16 GMT

    excellent article - sums up exactly the issues involved

  • U on March 29, 2014, 4:50 GMT

    Since everyone seems to not believe wikipedia (which in widely discussed matters like this is pretty accurate), lets look at the definition provided by the Law Society of the UK regarding lawyer conflict of interest - 'Conflicts of interests means any situation where: 1. you owe separate duties to act in the best interests of two or more clients in relation to the same or related matters, and those duties conflict, or there is a significant risk that those duties may conflict (a 'client conflict');or 2. your duty to act in the best interests of any client in relation to a matter conflicts, or there is a significant risk that it may conflict, with your own interests in relation to that or a related matter (an 'own interest conflict')'

    no. 2 applies to the current situation if you substitute "employer" for "client".

  • Dummy4 on March 28, 2014, 20:15 GMT

    Fantastic article. I am not a big fan of Mr. Keshavan but this is a very good explanation. I commend him for being lucid and more importantly bold. He has done what other cricket writers don't do. Called a spade a spade.

  • go on March 28, 2014, 19:25 GMT

    I pity on people who are questiong the use of wikipedia and its authenticity instead they should appreciate the facts presented in the article.

    The author used wikipedia as it is known by many people. Those who are questioning the authenticity of wikipedia go and check the meaning of conflict of interest in other dictionaries instead of commenting here. The meaning of conflict of interest same everywhere.

    And if you still don't understand, no one can help.

  • Azfar on March 28, 2014, 10:13 GMT

    Mukul, you have hit the nail on the head......this is the root of all problems. That is why I say that SC's choice of Gavaskar as interim head is not right. He is also afflicted with the 'conflict of interest' disease. He is an employee of BCCI and even if he gives it up for the duration of the probe he will expect to get it back later. So how can we expect him to support any hard decisions which go against the BCCI. As you say the rot starts from the top. This 'conflict of interest' clause should be re-instated without exception. Only then the process of cleanup can start. Another thing which I don't see beong discussed in the media much is that Srinivasan and BCCI are virtually running World Cricket now. Hence this malpractices don't just impact Indian Cricket, they can derail world cricket. We saw how BCCI bulldozed the 'Big 3' proposal. Today because of India financial clout everyone is silenced, but how long can this last. This has to stop.

  • Adrian on March 28, 2014, 9:17 GMT

    What a superb article. I must admit I hadn't know the extent of the corruption before reading this and I'm astounded how widely ignored the confilct of interest principle has been. I don't see how people took this man seriously with such a blatant disregard for anything approaching integrity. How did this man get into a position where he was to be chairman of the ICC? It shows how weak that organisation is too. Mr Srinivasan should never be allowed to be in charge of anything!

  • Rakesh on March 28, 2014, 8:36 GMT

    Great article Mukul. This clearly shows what Srini is capable of. Amending the constitution to suit his needs. Are CSK supporters still blindfolded to not see this? Supreme court has unfortunately buckled down. power wins all the time.

  • Saumil on March 28, 2014, 8:32 GMT

    The Supreme Court may say or do anything. But this is India where people with power and authority always get things their way, in the long run. Nothing is going to change. Srinivasan will be back at the helm after a few months and things will be back to the way they are.