Sahara pulls out of IPL over financial dispute with BCCI
New Delhi, May 21: The troubles regarding Indian Premier League doesn't seem to end as Sahara Pune Warriors failed to pay the full franchise fee for the current year which resulted in BCCI encashing the
New Delhi, May 21: The troubles regarding Indian Premier League doesn't seem to end as Sahara Pune Warriors failed to pay the full franchise fee for the current year which resulted in BCCI encashing the bank guarantee casting a shadow on its future in the cash-rich league in coming years.
"Yes, the BCCI has initiated procedure to encash the bank guarantee that has been deposited in order to procure Pune Warriors' franchise fee for the current year," a senior BCCI official told PTI today.
Sahara bought Pune franchise for a record Rs 1702 crore for 10 years. But they currently have dispute regarding the reduction of the franchise fee as initially there were 94 matches which was later reduced to 74 matches. The issue hasn't been resolved yet.
"In January this year, Sahara paid around 20 percent of the year franchisee fee which is approximately Rs 170 crore. The BCCI was told that they will pay the remaining amount by May 19 but they failed. The IPL governing council then decided to encash the bank guarantee."
However BCCI's decision to go ahead and encash the bank guarantee does raise a question-mark whether the franchise will be a part of the seventh edition of Indian Premier League next year.
"It is too early to say what will happen next year but yes things are indeed looking ominous," another senior BCCI official informed.
When BCCI treasurer Ajay Shirke was contacted in order to confirm the amount of bank guarantee, he refused to divulge any information.
This is not the first time that BCCI has encashed bank guarantees after franchises failed to cough up the fees. Kochi Tuskers Kerala and Deccan Chargers were disbanded from IPL after they failed to pay the required fees.
Pune Warriors' performance has not been good in the three seasons of IPL that they have taken part as they remained in the bottom rung.
Recollecting the 2012 withdrawals and the subsequent return, the Group said the BCCI did not keep its word with regards to arbitration.
"The BCCI approached us for a solution and requested us to not withdraw. After a series of discussions with the topmost BCCI officials including the BCCI President at Mumbai, a Joint Statement was issued by Sahara and BCCI in Feb 2012. The Joint Statement, amongst many other things, specifically mentioned the agreement to start Arbitration proceedings through immediate appointment of an Arbitrator," it said.
"...Sahara suggested the name of a Retired Hon'ble Chief Justice of India on the 5th March 2012 to be appointed as the Arbitrator. There was no response from BCCI for four months and after repeated prodding, finally on the 9th of July Sahara's advocates received a letter from BCCI rejecting the name proposed by Sahara without mentioning any reason and also without suggesting any alternatives," it added.
The company said the Board rejected all other names suggested by it for arbitration.
"...Despite our repeated efforts to have the Arbitration initiated, we sent other suggestion of names which too were turned down and instead meaningless communication was created to stall finalisation," it said.
"In the meanwhile, Sahara kept on paying the full Franchise Fee of Rs 170.20 crore annually, without prejudice to its rights and contentions, in the hope that this will be resolved soon. But unfortunately, it was not done," it added.
Sahara said its Chairman Subroto Roy met BCCI President on numerous occasions but the matter remained unresolved.
"Fed up with this stalemate our Hon'ble Chairman Saharasri ji had written to the BCCI president that the arbitration for downward revision of the fees has not progressed in 3 years time, hence, has requested for a proper meeting to personally discuss the way forward and explicitly said that if a downward revision is not possible then we would want to surrender the franchisee. This fell on deaf ear," the company claimed.
"Yes, the BCCI has initiated procedure to encash the bank guarantee that has been deposited in order to procure Pune Warriors' franchise fee for the current year," a senior BCCI official told PTI today.
Sahara bought Pune franchise for a record Rs 1702 crore for 10 years. But they currently have dispute regarding the reduction of the franchise fee as initially there were 94 matches which was later reduced to 74 matches. The issue hasn't been resolved yet.
"In January this year, Sahara paid around 20 percent of the year franchisee fee which is approximately Rs 170 crore. The BCCI was told that they will pay the remaining amount by May 19 but they failed. The IPL governing council then decided to encash the bank guarantee."
However BCCI's decision to go ahead and encash the bank guarantee does raise a question-mark whether the franchise will be a part of the seventh edition of Indian Premier League next year.
"It is too early to say what will happen next year but yes things are indeed looking ominous," another senior BCCI official informed.
When BCCI treasurer Ajay Shirke was contacted in order to confirm the amount of bank guarantee, he refused to divulge any information.
This is not the first time that BCCI has encashed bank guarantees after franchises failed to cough up the fees. Kochi Tuskers Kerala and Deccan Chargers were disbanded from IPL after they failed to pay the required fees.
Pune Warriors' performance has not been good in the three seasons of IPL that they have taken part as they remained in the bottom rung.
Recollecting the 2012 withdrawals and the subsequent return, the Group said the BCCI did not keep its word with regards to arbitration.
"The BCCI approached us for a solution and requested us to not withdraw. After a series of discussions with the topmost BCCI officials including the BCCI President at Mumbai, a Joint Statement was issued by Sahara and BCCI in Feb 2012. The Joint Statement, amongst many other things, specifically mentioned the agreement to start Arbitration proceedings through immediate appointment of an Arbitrator," it said.
"...Sahara suggested the name of a Retired Hon'ble Chief Justice of India on the 5th March 2012 to be appointed as the Arbitrator. There was no response from BCCI for four months and after repeated prodding, finally on the 9th of July Sahara's advocates received a letter from BCCI rejecting the name proposed by Sahara without mentioning any reason and also without suggesting any alternatives," it added.
The company said the Board rejected all other names suggested by it for arbitration.
"...Despite our repeated efforts to have the Arbitration initiated, we sent other suggestion of names which too were turned down and instead meaningless communication was created to stall finalisation," it said.
"In the meanwhile, Sahara kept on paying the full Franchise Fee of Rs 170.20 crore annually, without prejudice to its rights and contentions, in the hope that this will be resolved soon. But unfortunately, it was not done," it added.
Sahara said its Chairman Subroto Roy met BCCI President on numerous occasions but the matter remained unresolved.
"Fed up with this stalemate our Hon'ble Chairman Saharasri ji had written to the BCCI president that the arbitration for downward revision of the fees has not progressed in 3 years time, hence, has requested for a proper meeting to personally discuss the way forward and explicitly said that if a downward revision is not possible then we would want to surrender the franchisee. This fell on deaf ear," the company claimed.