This money was a secret facilitation fee paid by Sony to World Sports Group when the telecast rights were renegotiated with IPL in 2009, says a Mumbai Mirror report.
While day-long raids were being simultaneously carried out at Kolkata, Hyderabad and Chennai, Lalit Modi, ensconced on the plush 33rd floor of Four Seasons Hotel in Mumbai-in typical style, he's booked the entire floor-was being grilled by officers from Income Tax.
At the heart of Wednesday's relentless interrogation was one question:
Could he explain where Rs 400 crore had gone missing from IPL accounts?
This is what the investors want to know: In 2008 Indian Premier League signed a ten year deal with World Sport group for the exclusive telecast of IPL matches. The WSG in turn sold the India rights to Multi Screen Media (MSM) which controls Sony for $ 918 million . However, after the runaway success of the first edition of IPL, Lalit Modi felt that they had undersold the rights, and demanded to renegotiate the deal for $ 1.02 billion for the remaining nine years.
In response to which MSM approached the Mumbai High Court, then had second thoughts and agreed to pay IPL the monies they asked for in an out-of-court settlement which was facilitated by the World Sports Group to whom Modi had originally sold the rights. But this settlement was facilitated not by WSG's India branch but by its Mauritian branch. Mauritius is a well-known tax haven and is often used by corporate interests to channel money.
In addition to the 1.02 billion MSM was also asked to pay WSG, Mauritius, a 7.5 per cent facilitation fee which is equivalent to 80 million USD or Rs 400 crore. On April 14, 2009, MSM remitted from the Development Bank of Singapore USD 15.3 million to WSG and on June 26, 2009, USD 10.276 million, sources said.
During this negotiation with WSG Sony CEO Kunal Dasgupta also lost his job. However this facilitation fee was not made public and according to I-T sources neither is it a part of the IPL books.
The agencies suspect that the money was brought in through hawala channels and are investigating it as a case of possible moneylaundering. In this regard, the I-T department raided the offices of both MSM and WSG on Wednesday and also questioned WSG CEO Venu Nair at his Bandra home. The international taxation department is now planning to communicate with Singapore and Mauritius governments to investigate the flow of funds and furnish details. “We are writing a letter in this regard to respective governments,” said an I-T officer.
In addition I-T is also probing the antecedents of two companies, ABN Amro Corporation and Swadesh fund, registered in Mauritius. Both the companies were registered in February 2008, exactly the time the IPL was launched. The ABN Amro Corporation say I-T sleuths is not to be confused with the famous bank. In fact, investigations have found that this company exists only on paper.
The department has seized more than 2,000 pages of documents related to broadcasting bids from MSM, IMG and WSG offices. According to I-T sources, more than 20 officers participated in the raids which were related to a facilitation fee paid by MSM (formerly Sony Entertainment Television) to WSG.
