IT authorities issue summons to BCCI on IPL

The Income Tax department has issued summons to the BCCI seeking complete details of the eight original Indian Premier League franchises.

updated: April 18, 2010 10:09 IST
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The Income Tax department has issued summons to the BCCI seeking complete details of the eight original Indian Premier League franchises.

"Day before yesterday they had asked for details only about the two new franchises - their shareholding patterns, addresses, player auction and bidding process etc. Now they want us to furnish all the details about the eight other franchises too," Prof. Ratnakar Shetty, Chief Administrative Officer of the BCCI, said on Sunday.

Apparently the IT authorities are investigating the entire IPL structure, which has become a huge revenue-earning entity for the BCCI, since its inception in 2008.

Shetty said IPL chairman Lalit Modi or CEO Sundar Raman would be representing the Board during the summons on April 23.

The eight original franchisees are: Reliance Industries Limited for Mumbai franchise at USD 111.9 million; UB Group for Bangalore at USD 111.6 million; Deccan Chronicle Holdings for Hyderabad at USD 107.01 million; India Cements for Chennai at USD 91 million, GMR for Delhi at USD 84 m; Red Chillies Entertainment (Shah Rukh Khan/Juhi Chawla/Jay Mehta) for Kolkata at USD 75.09 million; Preity Zinta, Ness Wadia, Mohit Burman and Karan Paul for Mohali at USD 76 million; Emerging Media (UK) for Jaipur at USD 67 million.

The losing bidders on January 24, 2008 were DLF, who subsequently won the title rights, Deutsche Bank and Emerald Telecoms while late bids were received from Sahara India, which has now bid successfully for the new Pune franchise for USD 370 million, Future Group and ICICI Ventures.

The IPL, on its part, contracted top 80 players for the first players' auction which was held in February, 2008.

The original idea was to have only eight overseas players per team which was increased to 10 subsequently, out of which only four can make the playing eleven in every match.

The franchisees were to receive from the central pool 80 per cent of TV rights revenue for the first five years and 60 per cent from the sixth to tenth year.

They were also to receive 60 per cent from the central sponsorship revenues for the entire 10-year duration and were entitled to 100 per cent of local revenues like gate receipts, team sponsorships, hospitality and premium seating, franchise media platforms, match-day concessions and promotions etc.

Meanwhile, sources said the expenses incurred by various IPL franchisees since its inception in 2008, especially for engaging cheer leaders and in hosting parties, could be probed by the Income Tax authorities.

"Some of the franchisee owners were not connected with the game prior to the IPL and saw it purely from a business point of view. The IT exemptions are given to promotion of cricket activities only but expenses incurred in engaging cheerleaders and hosting after-match parties may not come under this ambit," they said.

Sources also revealed that these issues used to come up for discussion in BCCI meetings but dissenting voices were given a short shrift by the higher authorities.

"The BCCI may end up paying more to the IT authorities than they have earned through IPL if their stand does not pass muster during the investigation. All these could also affect the functioning of Board and the purpose for which it was created - for promotion and organization of the game," they added.