The central Board Of Direct Taxes (CBDT) has sent a detailed report to the Finance Ministry listing alleged regulatory violations via a web of companies and commercial contracts involving the top brass of the Indian Premier League, including Commissioner Lalit Modi, and some team owners as well, says an Indian Express report.
The report, prepared by the CBDT's investigation unit, points out how in most IPL commercial bids, the “customary” bank guarantee clause was waived.
Thus, parties could bid “through many fronts” and, as IPL Commissioner, Modi had “insider information” on all bidding processes, the CBDT report says.
Modi didn't respond to calls or text messages.
IT investigators have claimed they are exploring how “entities controlled by Netlink Blue and their associates in UAE,” had, between 2007-2008, allegedly routed money into Voyages, Modi's defunct TV channel.
Netlink Blue is owned by Akash Aurora who is considered close to Modi.
The inflows have been found to have been made without approval of the Foreign Investment Promotion Board (FIPB), the report says, since these were routed from companies other than Kuoni Travels and Voyages of USA which were the original party approved by the FIBP.
The CBDT report also lists the following for probe:
TV rights: These were earlier held by MSM (Multi Screen Media) or Sony TV and subsequently given to WSG (Worlds Sports Group). The second IPL contract was re-negotiated apparently in three hours and a facilitation fee of $ 80 million fixed ($26 million already paid) for WSG-Mauritius without payment of taxes.
Overseas TV rights: These were given to WSG/IMG (International Management Group) described by the IT Department as an “illiquid company” without any bidding/tendering.
Mobile/ live streaming/Internet rights: These were awarded originally to Live Current Media (LCM) which later floated Global Cricket Ventures-Mauritius — with Netlink Blue — and finally found their way to Elephant Capital controlled by Modi's step son-in-law Gaurav Burman. Elephant Capital is listed on London's AIM — Alternate Investment Market.
The IT department has found that while the original tender envisaged rights for five years, they were actually for a 10-year period and to be extended further.
Theatrical Rights: These were given first to Ever Lasting Sports-Dubai and then to Dar Capital/ Valuable Media and comprising around 12% of IPL revenue. The IT Department has described these entities as “unknown, without source of income, could be means of round tripping/laundering.”
Production Rights: The main IPL vendor is IMG/TWI and last year they won the contract for $9.5 million again without tendering. For the current year, a “limited tender” was issued and forensic examination conducted in the BCCI office revealed the tender was authored by a top IMG/TWI official himself. This led to re-tendering of the contract which was eventually awarded for $3.8 million.
