ED issues Rs 425cr FEMA notice to BCCI,IPL and others
The Enforcement Directorate has slapped a Rs 425 crore show cause notice against BCCI, IPL, their officials and private multimedia firms for alleged contravention of forex laws in awarding a cricketing media rights contract in 2009
Mumbai: The Enforcement Directorate has slapped a Rs 425 crore show cause notice against BCCI, IPL, their officials and private multimedia firms for alleged contravention of forex laws in awarding a cricketing media rights contract in 2009.
The notices have been issued to close to ten individuals and entities which include former Board of Control for Cricket in India (BCCI) boss N Srinivasan, the then IPL Chairman Lalit Modi, Chief Operating Officer (COO) Sunder Raman, and the officials of World Sports Group (WSG) and Multi Screen Media (MSM) for allegedly and fraudulently "manipulating" the contract and hence making illegal payments.
The development comes at a time when the latest edition of Indian Premier League (IPL) players auction is underway in Bangalore yesterday. The deal dates back to 2008 when the BCCI awarded the 10-year media rights to WSG on payment of USD 918 million. In the same year, WSG also entered into a deal with Multi Screen Media to make Sony the official broadcaster. The contract was replaced a year later with a nine-year deal where Multi Screen paid USD 1.63 billion.
The ED stepped in this case in 2009 and began a probe under the Foreign Exchange Management Act (FEMA) to investigate allegations that payment of Rs 425 crore facilitation fee by MSM Singapore to WSG Mauritius was made in an alleged unauthorised manner. It detected, sources said, that the deal payments were
made to "unauthorised beneficiaries" and not the cricketing regulating bodies as per the terms and rules enshrined in the contract.
The agency has now show-caused, sources said, those officials in these organisations who were at the helm and signatories to the contract deal as it probed and detected that FEMA and RBI laws were "contravened" in the final execution of this deal. The agency has issued the final notices after which all the notices are allowed to appeal against the order within a period of 45 days or else pay the charged amount as mentioned in the notice.
The ED, sources said, has earlier recorded statements of various entities involved in this deal and the Special Director and the Adjudicating Authority now issued these notices.