The franchise agreement allows the BCCI to terminate a team with immediate effect if there have been violations of any of the procedures that govern changes in ownership and control of a franchise.
The BCCI alleges that Rajasthan are guilty of violating the franchise agreement on three counts:
1). The original bid document is picked and signed by Manoj Badale, representing Emerging Media (IPL) Limited, a UK-based company, which wins the bid for the Jaipur franchise. The shares of the franchise, however, are held by two individuals, Ranjit Barthakur and Fraser Castellino, who are the only two shareholders representing Jaipur IPL Cricket Private Limited, the firm which signed the final franchise agreement on March 31, 2008. According to the BCCI, this amounts to stepping into the shoes of the original bidder without being a "group company or entity controlled by the bidder," which violates the tender process.
2. The franchise agreement states that no change of control can occur in the first three years. However, in the course of its investigation, the BCCI claims Rajasthan restructured its ownership pattern twice - in March 2008 and January 2009. During its internal probe in April 2010, the BCCI finds that on both dates when the franchise agreements were signed, neither Emerging Media (IPL) Limited represented by Badale, nor any Mauritius-based company had any shares in Jaipur IPL Cricket Private Limited. On March 10, 2008 Castellino transfers 5000 out of the total share capital of 10000 shares to EM Sporting Holdings Limited, Mauritius. The BCCI is unaware of the change of control. Similarly, Barthakur had transferred 4999 shares to EM Sporting Holdings Limited on January 27, 2009 and one share to Emerging Media (IPL) Limited, UK.
3. The board is miffed with Rajasthan for providing wrong information about the corporate structure of Jaipur IPL Cricket Private Limited. The board has also raised the inclusion of Jaipur IPL Cricket Private Limited as "incorrect" as the firm holding the franchisee rights.
The board alleges that Punjab is guilty of violating the franchise agreement on three counts:
1. The bidders for the franchise were led by Preity Zinta, who was named Chairperson of KPH Dream Cricket Private Limited, the company which held the rights to the franchise. However, the shares of the franchise were held by ACEE Enterprises Private Limited and Mohit Burman. The board says this amounts to stepping into the shoes of the original bidder "without being a group company or entity controlled by the bidder," which violates the tender process.
2. The franchise agreement states that no change of control can occur in the first three years. However, in the course of its investigation, the board claims that Punjab restructured its ownership pattern twice - in May and June of 2008.
In May, the two listed owners of KPH Dream Cricket, ACCE Enterprises and Mohit transferred their shares to Dabur Investment Corporation Limited and Windy Investments Limited. Then in June, the share holdings of Dabur and Windy dropped to 23%, with Preity Zinta, Ness Wadia, Colway Investments Limited, Karan Paul and Root Invest Private Limited sharing the other 77%.
3. In addition, the board says that the two violations above amount to Punjab having made false claims in its bid documents related to its ownership and subsequently in its declarations as a franchisee, which also gives the BCCI the right to terminate the franchise.