WSG India Head Breaks Down, Admits Payoff By MSM
In the first breakthrough in the widening investigation into alleged corruption in the IPL business, World Sports Group (WSG) has admitted it received Rs 125 crore from Multi Screen Media (MSM) after the latter was
In the first breakthrough in the widening investigation into alleged corruption in the IPL business, World Sports Group (WSG) has admitted it received Rs 125 crore from Multi Screen Media (MSM) after the latter was awarded the IPL broadcast rights, reports Times of India.
WSG has also acknowledged that the money given to it went out to other beneficiaries, some of whom, investigators suspect, could have ‘‘political links''.
Sources said WSG India head Venu Nair broke down during interrogation by I-T sleuths, admitting that the deal had taken place. The ‘‘admission'' can boost the efforts of investigators to get Sony World, the parent concern of MSM, to acknowledge in court having to pay “facilitation fee” to WSG to re-acquire the broadcast rights.
Investigators are working on the assumption that being a company that is listed in the US — which has stringent laws forbidding use of bribes — Sony World would find it difficult to refuse to cooperate with Indian agencies.
Investigations into the trail of flow of ‘facilitation fee' paid by MSM to WSG (Mauritius) have now led income tax authorities to British Virgin Islands, a tax haven.
The money was apparently transferred to the personal holding account of Seamus O'Brien, the founder of WSG, and not into the company's account. However, the company fronting this transaction goes by the name ‘Park House Holding'.
The company is registered in the British Virgin Islands and senior income tax officials said the money was transferred into O'Brien's account because WSG Mauritius was asked to do so. In Wednesday's raid, I-T officials had come across evidence linking payments made in Singapore. The money then went through layers of transactions before reaching BVI.
A senior income tax official familiar with the investigations said, ‘‘WSG is only a conduit for routing the money
back to IPL management through investments in various business concerns. The payment is for rights which arise out of India and for a contract signed in India and yet, no tax on these payments has been paid in India”.
Sources said that though MSM thought of moving the Supreme Court, IPL commissioner Lalit Modi allegedly put pressure to negotiate with WSG. However, Modi denied this to I-T during questioning.
Subsequently, MSM was formally signed as the official broadcast partners for the IPL in a fresh nine-year-deal ending in 2017 for which MSM paid around Rs 8,200 crore.
According to sources, WSG Mauritius was to be paid 7. 5% of the discounted value of the television contract and the same amounts to Rs 480 crore.
It is further learnt that Nitin Nadkarni, the Chief Financial Officer (CFO) of MSM has given a statement to the relevant authorities that such an agreement (the ‘facilitation fee' agreement) exists.
However, what is further interesting in the matter is that sources now claim, ‘‘four pages of that agreement that has been submitted are missing.''
However, what sent the investigation into a tizzy was when Nair said, ‘‘The deal was confirmed between the IPL/BCCI and WSG India but was asked to transfer the rights to O'Brien's personal account.''
It is not known as yet who asked Nair to transfer the money to a personal account.
‘‘It is straight away a Rs 240 crore tax evasion case,'' a source said, adding that ‘‘Nair has now agreed to cooperate'' on the condition that he is ‘protected'.
The Income Tax department probing alleged irregular transactions in the IPL has got "convincing evidence" of payment of "facilitation fee" to World Sports Group (WSG) by Multi-Screen Media (MSM) for acquiring T20 league's telecast rights, a senior officer said here on Thursday.
"We have got convincing evidence of a facilitation fee of around USD 80 million paid by MSM to WSG," the official said on condition of anonymity.
He said the search team had secured a copy of the contract which had the mention of facilitation fee having been paid and the broadcasting agreement between IPL and MSM.
A portion of the facilitation fee was understood to have been paid by MSM to an offshore company of WSG in Mauritius, a tax haven, without paying income tax on the transaction in India.
The searches, which were conducted by I-T officials on Wednesday at the offices of WSG, MSM, IMG -- all closely associated with IPL, and the premises of different franchises were aimed at collecting details of ownership and the stake holding pattern of the owners, he said.
"Whenever necessary, the department will summon the franchises. We are looking into the layers of ownership to find out if there are any proxy stake holdings," he said.
Industrial Conglomerate Adani group, which made an unsuccessful bid for a franchise in Ahmedabad, is expected to submit a copy of the bid document on Friday, he said.
WSG has also acknowledged that the money given to it went out to other beneficiaries, some of whom, investigators suspect, could have ‘‘political links''.
Sources said WSG India head Venu Nair broke down during interrogation by I-T sleuths, admitting that the deal had taken place. The ‘‘admission'' can boost the efforts of investigators to get Sony World, the parent concern of MSM, to acknowledge in court having to pay “facilitation fee” to WSG to re-acquire the broadcast rights.
Investigators are working on the assumption that being a company that is listed in the US — which has stringent laws forbidding use of bribes — Sony World would find it difficult to refuse to cooperate with Indian agencies.
Investigations into the trail of flow of ‘facilitation fee' paid by MSM to WSG (Mauritius) have now led income tax authorities to British Virgin Islands, a tax haven.
The money was apparently transferred to the personal holding account of Seamus O'Brien, the founder of WSG, and not into the company's account. However, the company fronting this transaction goes by the name ‘Park House Holding'.
The company is registered in the British Virgin Islands and senior income tax officials said the money was transferred into O'Brien's account because WSG Mauritius was asked to do so. In Wednesday's raid, I-T officials had come across evidence linking payments made in Singapore. The money then went through layers of transactions before reaching BVI.
A senior income tax official familiar with the investigations said, ‘‘WSG is only a conduit for routing the money
back to IPL management through investments in various business concerns. The payment is for rights which arise out of India and for a contract signed in India and yet, no tax on these payments has been paid in India”.
Sources said that though MSM thought of moving the Supreme Court, IPL commissioner Lalit Modi allegedly put pressure to negotiate with WSG. However, Modi denied this to I-T during questioning.
Subsequently, MSM was formally signed as the official broadcast partners for the IPL in a fresh nine-year-deal ending in 2017 for which MSM paid around Rs 8,200 crore.
According to sources, WSG Mauritius was to be paid 7. 5% of the discounted value of the television contract and the same amounts to Rs 480 crore.
It is further learnt that Nitin Nadkarni, the Chief Financial Officer (CFO) of MSM has given a statement to the relevant authorities that such an agreement (the ‘facilitation fee' agreement) exists.
However, what is further interesting in the matter is that sources now claim, ‘‘four pages of that agreement that has been submitted are missing.''
However, what sent the investigation into a tizzy was when Nair said, ‘‘The deal was confirmed between the IPL/BCCI and WSG India but was asked to transfer the rights to O'Brien's personal account.''
It is not known as yet who asked Nair to transfer the money to a personal account.
‘‘It is straight away a Rs 240 crore tax evasion case,'' a source said, adding that ‘‘Nair has now agreed to cooperate'' on the condition that he is ‘protected'.
The Income Tax department probing alleged irregular transactions in the IPL has got "convincing evidence" of payment of "facilitation fee" to World Sports Group (WSG) by Multi-Screen Media (MSM) for acquiring T20 league's telecast rights, a senior officer said here on Thursday.
"We have got convincing evidence of a facilitation fee of around USD 80 million paid by MSM to WSG," the official said on condition of anonymity.
He said the search team had secured a copy of the contract which had the mention of facilitation fee having been paid and the broadcasting agreement between IPL and MSM.
A portion of the facilitation fee was understood to have been paid by MSM to an offshore company of WSG in Mauritius, a tax haven, without paying income tax on the transaction in India.
The searches, which were conducted by I-T officials on Wednesday at the offices of WSG, MSM, IMG -- all closely associated with IPL, and the premises of different franchises were aimed at collecting details of ownership and the stake holding pattern of the owners, he said.
"Whenever necessary, the department will summon the franchises. We are looking into the layers of ownership to find out if there are any proxy stake holdings," he said.
Industrial Conglomerate Adani group, which made an unsuccessful bid for a franchise in Ahmedabad, is expected to submit a copy of the bid document on Friday, he said.