I-T searches premises of IPL's associates

The Income Tax Department on Wednesday searched the premises of companies associated with the IPL in the wake of allegations.

updated: April 21, 2010 14:08 IST
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Casting its net wide in the IPL probe, the Income Tax sleuths on Wednesday searched the premises of three companies associated with the league to uncover alleged financial irregularities in the cash-rich T20 entity.

IT officials searched the offices of Multi-Screen Media, formerly Sony Entertainment Television, International Management Group and World Sports Group (WSG), all of which are closely connected to the Lalit Modi-led IPL.

MSM is the telecasting agency of IPL, while WSG is its marketing arm. IMG is the organising agency of the IPL. The tax officials requested details of the contractual arrangements in relation to the BCCI and IPL, a WSG statement said.

WSG strongly refutes the allegation of any impropriety in relation to its deals in IPL, it said.

Besides, the IT sleuths also conducted an identical operation at the Bandra residence of Venu Nair, WSG's Chief Executive Officer.

A number of documents were seized by the IT officials during the operations, a source close to the development told PTI, adding while the search at MSM is still on, it is over at other places.

The operations, he said, were related to alleged payment of "facilitation fee" of USD 80 million by MSM to WSG.

In 2008, WSG bagged IPL television rights for 10 years with a USD 918 million bid and a promise to spend USD 108 million on the event. It also signed a deal with MSM making Sony the official broadcaster.

However, two months before IPL-2, the deal was scrapped. It was recast with MSM agreeing to pay USD 1.63 billion for nine years. According to IT sources, MSM agreed to pay WSG's offshore company in Mauritius a "facilitation fee" of 7.5 per cent of the IPL contract, which is around USD 80 million. The entire thing was dealt with by IPL Commissioner Lalit Modi alone.

On April 14, 2009, MSM remitted from the Development Bank of Singapore to WSG USD 15.3-million and on June 26, 2009, USD 10.276 million in two separate instalments, sources said.

When the BCCI came to know of the "clandestine" deal, they summoned Venu Nair, CEO of WSG, and he reportedly admitted to it having been made, the source said.

When contacted a senior official of MSM declined to comment and Nair too avoided the media.

Meanwhile, Director General (Investigation) of Income Tax, Mumbai, B P Gaur, is likely to meet senior officials in Delhi on Thursday to apprise them of the findings of the operations.

After the deliberations on Thursday, a decision will be taken on how to take the multi-agency investigation into IPL forward, the source said.

When contacted, Gaur declined to comment on the outcome of the raids but said "something will emerge by Friday." "We can't comment now, but something may emerge day after tomorrow (Friday)," he said.