Rajiv Shukla had assured us bank guarantee will not touched

BCCI’s release mentioned:

The BCCI has read in media reports that Sahara has purported to terminate its franchise agreement and to pull out of IPL, the 2014 season onwards. The BCCI has had no direct communication from its franchisee, Sahara Adventure Sports Limited, in this regard.  The BCCI can however confirm that, in order to satisfy the balance of the 2013 franchise fee of Rs 120 crore, which was overdue and owing to BCCI since 3 April 2013, it has encashed part of the bank guarantee put in place by Sahara Adventure Sports Limited.

The IPL Governing Council met with representatives of the franchisee on 21 February 2013 and received assurances that the franchisee would settle all obligations as they fell due. Once the 3 April 2013 due date had passed, the Governing Council had two letters sent to Sahara Adventure Sports Limited – one on 12 April 2013 and the second on 24 April 2013 – requesting settlement of the overdue amount. No payment was made and no response was received to the second letter and so, in order to protect its interests, the BCCI was forced to encash the guarantee.

Sahara’s response:

When we have paid the first instalment of franchisee fee in 2013 then too we have urged BCCI to resolve the issue of Franchisee fee before the second and final instalment of 2013 fell due.

Despite our repeated urges and request and also BCCI’s joint statement along with us in February 2012 there has been no inclination from BCCi to resolve the issue.

As for 21st February meeting there was no discussion on the amount of franchisee fees that is to be paid. It is totally incorrect.

BCCI’s release mentioned:

While it is true that the arbitration has not progressed, the BCCI cannot be held responsible since every one of the eminent retired judges suggested by the BCCI was not found acceptable by the franchisee. In order to break this impasse, a letter was sent to Sahara Adventure Sports Limited, proposing that as the claimant to the arbitration, it should approach the court to appoint an arbitrator so that the process could move forward. Again, no response was received to this suggestion.

Sahara’s response:

After the said letter of BCCI, Mr. Rajiv Shukla, Chairman, IPL had a discussion with our Chairman, Shri Subrata Roy Sahara, in which our Chairman had suggested that we are ready to make the final instalment payment and is ready to exit amicably if IPL doesn’t reduce the franchisee fee. But Shri Shukla had assured our Chairman to hold on and said that he will resolve this issue and till then the bank guarantee will not touched.

Moreover, the IPL Chairman, told Shri Roy not to take any action and that he will revert on the future course to be taken. And we believed Shri Shukla at that time. The bank guarantee lapsed on 2nd May and nobody from BCCI went for encashment of bank guarantee which gave us more reasons to believe in the assurance made by Shri Shukla. However after our last match on 19th May, the next day (i.e. 20th May) BCCI representative went to the Bank for encashment of Bank guarantee. It was a clear case of betrayal of trust inspite of assurances of the IPL Chairman.

It is evident now, that BCCI had not moved on 2nd May for revoking the bank guarantee as this would have jeopardise their tournament.  Sahara, from the first season of IPL, has been continuously requesting revision of the franchise fees. In the joint media statement given on 16th February, 2012, BCCI had stated along with Sahara that “BCCI and Sahara agree to start the arbitration proceedings initiated by Sahara through appointment of an arbitrator to address Sahara’s claim for reduction in franchisee fee for 74 matches.” Subsequently on various occasions Sahara had suggested names of imminent retired judges as arbitrators each of which were rejected by BCCI. BCCI engaged Sahara in prolonged correspondence, but failed to facilitate the arbitration process as agreed.

BCCI’s Release Mentioned:

The BCCI has at all times acted in accordance with its franchise agreement with Sahara Adventure Sports Limited, and is not able to enter into a private negotiation on the quantum of the franchise fee which was offered by Sahara Adventure Sports Limited in its response to the Invitation to Tender floated by the BCCI in March 2010.

Sahara’s Response:

Sahara has always acted in accordance with Franchise Agreement and in fact, despite BCCI unilaterally reducing the number of matches, Sahara continued to participate in the league and make payments as per the Franchise Agreement.  On the question of ‘private negotiations’, last year on February, when we have decided to pull out of IPL and Indian Cricket team sponsorship, the President of BCCI, IPL Chairman and other senior functionaries of BCCI met us, negotiated with us and a joint statement was worked out (in which they also had assured the resolution of the franchisee fee issue) – was that not a private negotiation? Should the words given by the Chairman of IPL be treated as private negotiation?

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