The Buck Doesn’t Stop with Modi

The BCCI’s charges against Lalit Modi are unlikely to get very far so long as there are fears of what else might show up.

For a man whose primary means of communication with the wider world has been a medium that enforces 140-characters-only brevity, Lalit Modi’s love for making grandiloquent speeches is somewhat surprising. In what was in effect his farewell speech at the closing ceremony of IPL 3, in a confetti-littered DY Patil Stadium, he invoked Martin Luther King Jr, Zen masters and even the Bhagwat Gita. “For many years, I had a dream,” he beamed, reading out from a piece of paper, “that India could have a sports league that could be envied by the whole world. I dreamt that a national passion, cricket, would captivate fans all over the world…”

In proclaiming the event a huge success (“the Indian People’s League”), the IPL’s then chairman and commissioner retained the self assurance that is taken so often as cockiness. He was ready to take full responsibility in case of any irregularities in the IPL’s scheme of affairs. The usual Modi bluster? Not quite.

Just 12 hours later, a meeting of the IPL governing council arrived at the conclusion that almost everything was alright with the big-money league, except the involvement of Modi. The keeper of Indian cricket, the Board of Control for Cricket in India (BCCI), would have you believe that its role as that of a rabbit caught in the blinding headlights of commercial success, the headlights of Mr Modi’s Hummer.

If Modi seems confident of his authority over the IPL despite the BCCI’s 22 charges of ethical and financial misconduct, he may have reason. Income Tax officials have combed through IPL documents and franchisee accounts, but little evidence has surfaced so far that could implicate Modi in a criminal case.

What are the most serious charges that the BCCI has slapped on him?

1. That he rigged the auction bidding for two new teams (Kochi and Pune), and attempted collusive bidding.

2. That he committed wide-ranging financial violations.

3. That he holds benami (disguised) stakes in three teams.

4. That he failed to disclose his direct or indirect interests in Rajasthan Royals, King’s XI Punjab and Kolkata Knight Riders.

5. That he tried to intimidate the new Kochi franchise owners into surrendering it.

6. That he got an indirect $80 million kickback while renegotiating TV broadcast rights with Sony after IPL 1. Also, that the broadcast deal was not passed by the IPL’s governing council and has only Modi’s signature.

There are other banal allegations of ‘indiscipline’ and arcane acting-against-the-party-interest variety of charges that politicians usually face while being expelled. “Of all the charges, the most serious is Modi receiving kickbacks for the TV deal,” says a leading Supreme Court lawyer under condition of anonymity, “If the money trail can be traced to Modi, and shown that it was used to finance his private jet, he’s in for trouble. What could also implicate him are telephone tappings and evidence of forged documents, etcetera, if any. Other accusations involve procedural matters that pertain to the manner in which the BCCI functions. As for wide-ranging financial irregularities, the BCCI’s own finances will come under thorough scrutiny, which may not be good news for several past and present office bearers.”

Take the specific case of the ‘facilitation fee’. Multi Screen Media (MSM), Sony Entertainment Television’s holding company, paid $80 million to World Sports Group (WSG) as ‘facilitation’ money to withdraw from the telecast rights contract in its favour. The opaque and complex structure of the TV rights deal, in many ways, is characteristic of the way the IPL has been operating. WSG, a global sports rights marketing firm, had bagged 10-year rights for $918 million at the very onset. But it later struck a back-to-back deal with MSM to telecast the games. In 2009, high on success, the IPL cancelled WSG’s rights—seemingly to capitalise on the unexpectedly large viewership—and signed a new deal assigning the rights to MSM for $1.69 billion for nine years.

The $80 million is supposed to have facilitated this switch, and now it is alleged that $25 million of the sum was quietly routed to tax haven accounts held by Modi and his political cronies, and that Modi used part of this kickback to buy a personal jet through a company incorporated in Cayman Islands.

“We can endlessly debate the moral question of why tax havens exist, but it’s a fact that they do, and it is legal for wealthy individuals and businesses to have bank accounts or a nominal holding company in those countries and principalities to evade the taxman,” says the lawyer, “How many instances do you know where the ultimate beneficiaries of these secretive accounts were traced?” Investigations of most bribery cases involving high-profile politicians have invariably hit a dead end once the money trail led to a tax haven account. Will this case be any different?

The relatively pinnable accusation relates to conflict-of-interest issues. Mohit Burman, a scion of the Dabur family, and Suresh Chellaram, a British citizen with large business interests in Nigeria, are the largest shareholders in Kings XI Punjab and Rajasthan Royals, respectively. And both are Modi’s close relatives. But these charges would have greater credence if made by parties bsolutely above board. Conflict-of-interest is a way of life within the BCCI bureaucracy. Chennai Super Kings’ owner N Srinivasan, for example, bought the franchise while he was the BCCI treasurer, the man who watches the finances. His defence that he sought the clearance of Sharad Pawar, then BCCI president, is limp at best. After all, Srinivasan is not just Tamil Nadu’s cricket satrap, he is known to have rendered yeoman service in Pawar’s election as BCCI president against Jagmohan Dalmiya, who was aided by another southern satrap, AC Mutthiah.

At any rate, many of these questions have been around ever since the IPL began. Why did the BCCI whistle away as Modi’s windfall stuffed its coffers and then suddenly wake up to find its world upside down? What were the governing council and BCCI president up to while the IPL’s chairman was flouting rules so brazenly? And what about his mentor?

Back in 2008, after season one, just about every BCCI official one met was in awe of Modi’s execution skills. “We estimated IPL to become profitable only after five years. But what Lalit Modi has done is phenomenal. Hats off to him,” crowed Ratnakar Shetty, the BCCI’s chief administrative officer, in June 2008.

Shashank Manohar, current BCCI president and the man behind Modi’s ouster, has since given a clean chit to the latest round of franchise auctions, the one that sparked off the current controversy which has nearly brought the IPL crashing down. “There is no question of irregularities with regard to the two new franchises,” Manohar has announced, “Because of the bid conditions, which were unreasonable when the first tender was issued, the governing council took a decision to cancel [it]. As for the two new bids, there is no irregularity as far as the board is concerned. There is a complaint made by the Kochi franchise that they were armtwisted by Modi to surrender their rights in favour of somebody else.”

The convoluted ownership structure of the Kochi franchise, and the anonymity and curious antecedents of its owners, is not dissimilar to that of the three franchises put in the dock by the BCCI.

Let’s face it. Lalit Modi and the IPL are both BCCI creations. So once things go awry, it can’t disown the products it was so proud of till just a few weeks ago.

BCCIcricketIPLLalit Modi