‘Mr Lalit Modi has had a trail of failed ventures and defaults till four years back but has a lifestyle now that includes a private jet, a luxury yacht and a fleet of Mercedes S class and BMW cars all acquired in the last three years.'
This is the opening of a highly confidential and explosive report by the income-tax department that has been in the possession of the government for six months now but formed the basis of any action only on Thursday evening after a raging controversy over secret ownerships and sweetheart deals in the Indian Premier League, or IPL, stalled both houses of Parliament, says an Economic Times report..
The report quoting highly-placed sources in the I-T department and the Congress party said, Modi has been on the government radar for quite sometime.
The alleged opaqueness with which he conducted the multi-billion dollar cricket tournament and the manner in which he took on home minister P Chidambaram in 2009 seem to have resulted in a detailed enquiry into his activities by the I-T department.
The report, whose contents were described to Economic Times, paints a startling picture of the activities of the controversial IPL commissioner, ranging from his manipulation of land deals in Rajasthan and the existence of a maze of shell companies and offshore entities used to route payments and equity stakes worth hundreds of crores of rupees.
The Economic Times report says, the I-T report makes the startling allegation that Modi—through his associates—was ‘involved' in ‘betting', while “insider information and outcome fixing of IPL matches were hinted at”.
The six-month-old report, which I-T sleuths maintain is the basis of current investigations, is obviously referring to betting and insider information in the first two IPL tournaments, not the current one.
In preparing the report, investigators seem to have accessed his email account, confidential conversations on a UK-registered cell phone number and regulatory filings from across the globe, from Mauritius to Ireland to the US. Some other Indian cell phone numbers have also been unearthed which the I-T sleuths claim Modi “keeps changing”.
According to Economic Times, the report alleges that Modi is “apparently deeply embroiled in both generation of black money, money laundering, betting in cricket (match fixing of certain IPL matches)”.
A number of his associates named in the report might come under the scanner as the investigation, which started with visits to Mr Modi's offices on Thursday evening, progresses through the coming weeks.
Even though the report detailed the premises the tax department wanted to raid and sought permission to go ahead, political clearance was not granted until junior minister for external affairs Shashi Tharoor stepped into IPL's murky quicksand and with him dragged the government and the Congress party into one of the biggest scandals in recent times.
“This is not just a Pandora's box but a Pandora's chest that has been opened,” said a senior Congress leader who has knowledge of the report. “This will indict everyone,” he said. The report refers to one Deepa Raizada as a close associate of Mr Modi “who handles his cross-border transactions and offshore companies”.
Raizada is CEO of Modi Entertainment Networks and has worked at the firm for nearly 10 years, according to two persons who work at the company.
The I-T report says she has previously worked with Equity Associates, a boutique investment firm based out of Ontario, Canada. Raizada did not respond to calls or text messags from Economic Times.
The Economic Times says, according to the I-T report, Modi himself is involved through Samir Thukral, a Delhi-based “page 3 personality” with an “opulent lifestyle despite having no apparent source of income”.Thukral is a permanent fixture at all IPL matches with VIP access, the report says, adding that he “carries out the betting on behalf of Lalit Modi”.
I-T sleuths are investigating “a lot of matches of IPL, especially involving the three teams in which Modi has an interest”. The mobile number listed in the report against Thukral actually belongs to Samir Thukral, a co-founder of Shree Capital Advisors, a Delhi-based private equity advisory firm, the ET report says.
Meanwhile, Indian Express has reported that several stake-holders — among them relatives and friends of Lalit Modi — are likely to face the heat as Income Tax officials have found evidence of huge “back-end” transactions being conducted abroad before and after signing of IPL contracts.
With financial transactions and holdings of all teams under the scanner, the three names figuring prominently in the probe are Akash Arora, Manoj Bedale (Rajasthan Royals) and Modi's step son-in-law Gaurav Burman (Kings XI Punjab). Interestingly, some of these names also figured in the IT Department's “source reports”, which had been submitted to the Central Board of Direct Taxes (CBDT) long before the face-off between Shashi Tharoor and Modi began, the IE report says.
These “source reports”, available with The Indian Express, detail the meteoric rise in Modi's financial fortunes and assets acquisition over three years of the IPL from an earlier “background of failed media ventures, drug cases and defaults”.
However, no request for back-up investigations has as yet been routed by the IT Department to either the Enforcement Directorate or the International Taxation Department.
As far as the Kochi team is concerned, sources said, the hitherto undisclosed stakes of two Test cricketers are being investigated.
The holdings of the Kochi team and the sweat equity of Sunanda Pushkar were the main focus of the report prepared by the department for the Finance Ministry.
While Modi has maintained that neither his phones or computers were taken by members of the IT team that “visited” his offices in Mumbai, key members of the team say his computer hard disk was easily cloned.
Similarly, all data from Modi's phone has been copied and is being examined. It includes several SMSs sent by Tharoor, but officials maintain that from an investigative point of view, such information is not important. The BCCI will most certainly ask Lalit Modi to quit as the commissioner of IPL, two top BCCI officials told Economic Times on Sunday.Modi has almost no support in the IPL governing council now, they said. “Everyone is upset at what is happening now. The governing council will meet in the next two days,” one of them said.
The technicalities of the administrative structure of the board is such that if Modi challenges the decision, matters can go all the way up to the BCCI general body, in which case each of the 30 state cricket associations that comprise the cricket board and the body's president will have the final say in the matter.
There is only one way Modi could swing the decision in his favour if the governing council decides to sack him: by winning the support of at least 16 state associations at the general body.
However, it will be very tough for Modi to win over so many state associations because most cricket administrators are upset at the high level of scrutiny Modi has caused to bring upon the activities of BCCI and associated bodies. One of the officials, when asked if IPL can go on without Modi, said: “Nobody is indispensable”.
