The IPL governing council has set August 31 as the deadline for the owners of Deccan Chargers franchise to clear player payments and sort out the financial problems with the banks to avoid any stringent action. In an emergency meeting called on Tuesday in New Delhi, the governing council confronted the owners of Deccan Chronicle Holdings Limited, who hold the rights for the Hyderabad-based franchise, to explain in detail as to why the company had mortgaged the team ownership rights with two leading Indian banks.

According to the BCCI officials, the board owns the ownership rights and that no franchise could mortgage the rights on its own.

"The governing council asked the owners of Chargers to clear the players' payments as by this time usually almost 60-70% of the contractual amount usually gets paid. But the franchise had defaulted on that. Secondly, they need to sort out the financial mess with the various banks to make sure the team remains unbothered. We need to protect both the IPL and the players," a governing council official said.

According to the official, the BCCI was concerned after the banks had directly sought the board's involvement, asking to pay all the money set for the franchise, directly to them as Deccan Chronicle Holdings Limited owned them big money. "What is more concerning is the Deccan Chargers owners have hypothecated the intangibles. They have told the banks that the team has a certain market value and based on that they had procured the loans," the official said.

T Venkatram Reddy, the owner of franchise, was present at the meeting, but was adamant that the issue was unnecessarily blown out of proportion. "He outrightly blocked all the allegations by the banks and was confident all issues would get sorted by August 31," the official said. However, it is understood that the BCCI had already checked with the Registrar of Companies and found out that Deccan Chronicle Holdings Limited had accumulated borrowing charges amounting to INR 3200 crore.

According to the official, the banks were interested in knowing if they were in any position to sell the franchise on their own since the owners had defaulted to clear the dues. "We don't know what exactly the amount is but the very fact that the banks have approached us means it is a serious issue," the board official said.

At the two-hour meeting, the Deccan Chargers were told that their immediate step should be to clear player dues over the next fortnight. The 15-day deadline has also given the Deccan Chargers owners the option of giving the presenting the details of the prospective buyers of their franchise to the Governing Council. Officials say that the prospect of the termination of the franchise had arisen "almost 15-20 days ago" however, the BCCI was "keen to be seen to aid the franchises to a limit."

Nagraj Gollapudi is an assistant editor at ESPNcricinfo