Corporate and BCCI rules make it difficult for N Srinivasan to sell Chennai Super Kings or change the ownership pattern to comply with the court's condition. The Supreme Court on Thursday passed an order stating Srinivasan cannot seek re-election to the post of the BCCI president till he severs financial ties in the IPL.
Srinivasan can cut ties with the IPL in two ways. One, by resigning as the India Cements vice-chairman and managing director and giving up all his family's stake. Two, to sell off Chennai Super Kings and then contest the BCCI election, which as per the apex court directive has to be held in six weeks.
Considering that Srinivasan has continued his father's legacy as the India Cements Ltd head, it is highly unlikely that he will explore the first option.
The second option might appear feasible. Some of Srinivasan's aides in the BCCI believe that the decision to convert Chennai Super Kings into a wholly-owned subsidiary of India Cements Ltd from a division last year was to initiate the same process.
To begin with, Chennai Super Kings will require a prospective buyer. Despite the team's consistent success on the field, the IPL corruption scandal has tarnished the image of CSK. Considering the legal tangle the BCCI and CSK are involved in, industry experts believe it will be risky for any investor to buy the team right now.
Even if there is a prospective buyer, Srinivasan may just run out of time. According to the Companies Act 1956, the law that governs public limited companies, disposing off a wholly-owned subsidiary requires approval of the annual general meeting or special general meeting. An SGM, if called, requires at least a 25-day notice.
The SGM can be held with shorter notice if all the shareholders submit a written consent for it. With India Cements' shareholding pattern - it has more than 88,000 shareholders - SGM will require at least 25 days' notice. If approved by the SGM, the proposal will then have to be sent to the BCCI.
The BCCI procedure for allowing change of control of a franchise is complex. Such a proposal is first put forward to the IPL governing council and then either working committee or the AGM. Considering that the BCCI AGM has to be held in six weeks, there will be only one working committee meeting.
With the BCCI rulebook prescribing a minimum of three-week notice for the AGM to be held, India Cements may not have enough time to get the proposal approved.