MUMBAI: Deccan Chronicle on Saturday filed a petition in the Bombay High Court seeking a stay on the BCCI‘s decision to terminate the contract it had with the Indian Premier League (IPL) for IPL Twenty20 cricket franchise Deccan Chargers.

BCCI Secretary Sanjay Jagdale, in a statement, said the court heard both the parties and posted the petition for hearing on Monday, 17 September.

Earlier, explaining the decision to terminate the contract, Jagdale said despite the High Court appointing a court officer to act as an Observer at the opening of the tender, which was conducted under the aegis of the BCCI, to save the beleaguered franchise, Deccan Chronicle Holdings Ltd rejected the bid that was received in the amount of Rs 4.50 billion cash and an equal sum in convertible debentures. This was despite the bidder meeting the eligibility criteria of the BCCI.

"BCCI has received a lawyers notice invoking arbitration from the franchise stating that it had not committed any breaches and even if such breaches were committed, the BCCI should not act to terminate the franchise till Yes Bank furnishes sufficient finance to cure the breaches. By this, Deccan Chronicle Holdings has clearly admitted its inability to cure its breaches within the time stipulated in the BCCI notice despite every bit of assistance from the BCCI," a BCCI statement said.

He said since the month of May, BCCI has received repeated assurances that the overdue player fees would be paid but all of those promises have remained unfulfilled.

The Governing Council (of the IPL) took note of the sudden change of stance by the franchise and also the fact that any further extension of time would seriously prejudice the interests of the players. The governing council at an emergency meeting in Chennai on Friday night took the final decision to terminate the contract with Deccan Chargers owner Deccan Chronicle.

"Considering the stated position of the Deccan franchise to refuse to rectify the various defaults including payments to players, foreign Boards etc, as also the deleterious effect such conduct would have on the reputation of the IPL and the franchise itself, a decision was taken to forthwith terminate the Deccan Chargers franchise," BCCI stated.

Jagdale stated that the BCCI was completely justified in its action which was taken with careful deliberation and only due to the absolute inability of the franchise to effectively run the team.

Reports had earlier indicated that Yes Bank, one of the banks that had loaned Deccan Chronicle money, had agreed to pay the players‘ salaries. The deadline for clearing players‘ dues was 1700 hrs Saturday.

Also Read: BCCI terminates Deccan Chargers contract

MUMBAI: The Twenty20 cricket Indian Premier League (IPL) governing council has terminated the contract with its Hyderabad franchisee Deccan Chargers, ending the ambitious journey of the promoters of Deccan Chronicle Holdings who were dreaming of extending their core media business to other lines of growth opportunities including the high-profile cricket property.

The Council took this extreme step late Friday night on grounds of a breach of contract. The decision was taken at an emergency IPL governing council meeting in Chennai, it is learnt. The final call was taken by BCCI President N Srinivasan.

IPL will now call for bids for a new franchise on Saturday.

The termination of the Deccan Chargers contract is as surprising as the decision of the team owner DCHL on Thursday to reject the sole bid it received from PVP Ventures Ltd to buy the franchisee for Rs 9 billion.

BCCI?s working committee was expected to decide on the fate of Deccan Chargers at its scheduled meeting on Saturday.

Deccan Chargers had rejected the sole bid on grounds of unacceptable payment terms. PVP Ventures had offered to pay Rs 4.50 billion in cash and the remaining in instalments but without providing bank guarantees. The bank lenders of DCHL were insisting upon bank guarantees.

The BCCI, in a statement on Thursday, had said the bid by PVP Ventures met its eligibility and suitability criteria. "The bid was then reviewed by Deccan Chronicle Holdings Limited which, in its discretion and with no role being played by BCCI, rejected the bid on the basis of the payment terms offered by the bidder."

Also read:

Sole bid for Deccan Chargers rejected

MUMBAI: Deccan Chronicle Holdings Ltd (DCHL) rejected the sole offer it received at the Thursday?s bidding for sale of its IPL franchise Deccan Chargers, raising a major question mark over the financially-distressed company‘s plans for mastering its debt crisis.

The ailing Hyderabad-based media company will have to discover a new escape route soon to stop the BCCI from taking the hard decision of terminating its IPL contract with DCHL. The working committee of India‘s cricket board meets on 15 September to decide on the fate of Deccan Chargers.

PVP Ventures, a film production company, had put in a bid of Rs 9 billion for purchase of Deccan Chargers but sources say the franchisee owner refused to accept it saying the offer to pay the price in installments was not acceptable without providing bank guarantees.

According to the sources, PVP Ventures had offered a payment of Rs 4.50 billion in cash while the remaining half would be in the shape of convertible debentures. Deccan Chronicle?s decision to reject the payment terms was prompted by lender banks. The banks, which met in Mumbai on Wednesday to considering easing the terms for repayment of loans granted to Deccan Chronicle, had deferred any decision till the next meeting on 26 September.

The bidding was conducted under the auspices of the BCCI, the owner of IPL, but only PVP Ventures submitted its bid. Videocon Industries CMD Venugopal Dhoot and a little known R.N. Sports Club had expressed their interest in buying Deccan Chargers but appear to have decided against bidding for the IPL team at the last moment. Dhoot had told Indiantelevision.com that his bid could be around Rs 7 billion.

The BCCI in a statement said the bid that was received by Deccan Chronicle met its eligibility and suitability criteria. "The bid was then reviewed by Deccan Chronicle Holdings Limited which, in its discretion and with no role being played by BCCI, rejected the bid on the basis of the payment terms offered by the bidder."

BCCI President N Srinivasan told reporters after the bidding process, "We found that they (PVP Ventures) were acceptable. However, the owners of Deccan Chargers rejected the bid."

The BCCI will have to consider several factors, including the financial implications, before resorting to any hasty action that includes cancellation of the franchisee licence of Deccan Chronicle. GroupM ESP managing partner Hiren Pandit feels the BCCI can make the offer lucrative by offering some flexibility in the bid conditions. "It will help if the location of the franchise can be changed. Ahmedabad, for instance, has more revenue potential than Hyderabad," he said.

The suggestion to offer the buyer an option to shift the franchise base from Hyderabad to a new city like Ahmedabad will, however, mean shutting the door to an existing revenue stream. "If they want to have a new city franchise, they can always add an IPL team. It is in their best interest to continue with the Hyderabad franchise and then when they decide to have one more team, they can start afresh to get the best commercial terms," an industry observer said.

Deccan Chronicle Holdings, which has a profitable publishing business with newspaper brands such as Deccan Chronicle and Financial Chronicle, is in a financial mess having amassed huge debt (unconfirmed reports put the total debt at closer to Rs 40 billion) and is in dire need of funds to pacify angry lenders.

The rejection of the sole bid at a decent price came as a shock as a price of around Rs 7 billion, including assumption of any liabilities, was considered to be a fair valuation.

The price of Deccan Chronicle shares fell after the news that the company has rejected the sole bid broke at around 3 pm, after being higher than Wednesday?s closing price for most of the day on hopes of fund flow from sale of the IPL team. The company?s shares closed at Rs 10.84, down 1.72 per cent from Wednesday?s close and almost 80 per cent down from its 52-week high.

Deccan Chronicle had last week issued a tender inviting bids for buying the Hyderbad IPL team, under the aegis of BCCI. As per the tender notice, bidders were required to enter into a new franchisee agreement with BCCI. The purchase consideration would be paid into a bank account as decided by the lending banks, with 5 per cent payable directly to the BCCI.

The winning bidder would have acquire Deccan Chargers on an "as is where is" basis, which means that the new buyer had to use the name Deccan Chargers and also clear any liabilities.

MUMBAI: Former Indian Premier League (IPL) chairman, commissioner Lalit Modi has said that allegations levelled in show cause notices by the ED for alleged forex law violations of over Rs 13.10 billion in the conduct of the second edition of the event in South Africa concerned "collective responsibilities" rather than being personal.

"The Enforcement Directorate (ED) show cause notices reveal that ED has been investigating alleged violations under Fema in relation to BCCI contracts and in respect of the general conduct of the IPL.

"The allegations reflect collective responsibilities rather than personal responsibilities. It is significant to note that the Enforcement Directorate has not identified any specific contravention under Fema committed by our client," a legal firm representing Modi said in its reply to the Directorate.

The 11 notices were issued by the ED against BCCI, Modi and six others for alleged contravention of Foreign Exchange Management Act (Fema) involving about Rs 13.17 billion in November last year in connection with the conduct of IPL in South Africa during 2009.

"My responses to the show cause notices show my commitment to complying with all requests made to me by the authorities in order to clear my name of any association with these investigations," Modi said.

He said the notices are to establish whether or not an inquiry should be held for the purpose of making an adjudication.

"I continue to remain confident that I have done nothing to warrant the continued investigation of my role as chairman of the IPL," Modi, who is in London, said.

Last month, the ED slapped show cause notices on Modi, officials of the Board of Control for Cricket in India, and HDFC Bank for contravention of Fema regulations to the tune of Rs. 600 million while awarding various contracts.

"This week, I have presented my reply to the Directorate of Enforcement?s 11 Show Cause notices relating to the Foreign Exchange Management Act (Fema). In simple terms, the act requires certain foreign exchange transactions to be approved by the Reserve Bank of India (RBI) and the current investigations surround the potential contravention of the law in the BCCI?s dealings with Cricket South Africa [CSA) for IPL 2. The ED delivered the notices to several recipients including me and in doing so they gave me an opportunity to fully reflect the activities surrounding the tournament in South Africa. I have always said I have nothing to hide".

He has also said that there was no direct allegation against him and he chose to receive the notices so he could explain the issues.

" Within the 11 notices I have received, there is not one single allegation against me personally. I was, of course part of the IPL at the time and that is why I regard the receipt of the notices as an opportunity to explain the issues at hand and, in doing so, clarify the innermost workings of the BCCI at the very highest level. It?s also worth noting that I voluntarily received the Show Cause notices in order to do so."

The allegations are related to the second edition of the IPL in 2009, which was shifted to South Africa after failing to get security clearance to stage the event in India.

According to Modi?s reply, all activities of IPL had approval of the Governing Council, headed by him and involving members of the BCCI.

"All activities of IPL are acts that have documented approval from collective Governing Council or Working Committee Meetings in accordance with BCCI/IPL process.

"Our client has earlier provided documentary evidence to the complainant which illustrate collective council or board approval for all activities. Thus, no action of our client can be termed as unauthorised, unilateral actions on his behalf," the reply said.

Modi said that IPL like any other committee of BCCI for example finance committee, legal committee or marketing committee is merely to assist and aid the BCCI.

"The members of such Committees including the chairman thereof cannot be said to be person in-charge or responsible to the BCCI for the conduct of business of the BCCI.

This is so because IPL is merely a sub-committee of the BCCI and has no control over the affairs of BCCI rather it is controlled by BCCI. IPL also has no say upon any financial drawings, disbursements or remittances as such matters are controlled by persons who are incharge of BCCI namely the president, the secretary and the treasurer. IPL does not also have any separate existence".

He said the ED is investigating claims that the BCCI made payments to Cricket South Africa (CSA) and administered an account in South Africa without the necessary permissions required under Fema.

"At the time, I was, of course, IPL Chairman. As a sub-committee of the BCCI, the IPL does not have an independent existence or any financial drawing or disbursement powers. All accounts are operated by the BCCI. When it became clear that IPL 2 couldn?t take place in India because of security issues relating to the elections, we made the collective decision to take the tournament to either England [ Images ] or South Africa. That decision was taken at a meeting of the BCCI Working Committee on 22nd March, 2009. During the meeting, it was also agreed that an overseas event meant that a  new bank account would be required somewhere abroad to take care of all financial considerations and that, in accordance with the constitution, the Secretary of the BCCI, should seek clearance from the RBI".

He was following the instructions of BCCI president N Srinivasan, when it came to setting up of the bank account in South Africa. "On 25th March, I was one of several recipients of an e-mail sent by the then Secretary, Mr. N Srinivasan, which explained that RBI policies in South Africa meant the accounting set up would need to follow the methods adopted by the ICC during international tournaments. Specifically, this meant that CSA would administer the account on behalf of the BCCI with the latter making payments to balance the transactions. As was reflected in the meeting on 29th March, the appropriate BCCI offices were required to ensure all regulatory processes were adhered to. That is a singular responsibility, which constitutionally rests with the Secretary in association with the Treasurer.

"Significantly, however, it was Mr. Srinivasan?s view that because the IPL 2 account was now going to be operated by CSA, any transfer of funds would be covered under current account transactions and would not require RBI approval."

Modi was also surprised that the BCCI has said that IPL 2.0 was owned by South Africa.

"I was surprised to learn that the BCCI in its reply to ED is now portraying IPL 2 as a CSA-owned tournament in its own responses to the Show Cause notices. This is just untrue. IPL 2 was a BCCI tournament all along. The fact is that throughout the tournament, CSA administered the accounts, but was not authorised to make ANY unilateral payments from the account as the money was regarded as BCCI funds. Any transaction required BCCI authorisation and CSA was considered a service provider for which fees were paid. For additional clarity on this point, it?s important to note that all vendors, contractors and suppliers were selected and appointed by the BCCI. It?s therefore interesting to consider why the BCCI is now painting a different picture."

"For the record, I had no transactional mandate, nor any cheque signing powers" He said that should not be held responsible for any wrongdoings as all decisions were taken by the then secretary Srinivasan.

"Everyone knows the tournament was an outstanding success. The CSA and the South African people embraced the event in a manner that was beyond our wildest dreams and IPL 2 brought in exceptional revenue for the BCCI - and consequently for India. The route for all funds was administered in accordance with the agreed principles. As Chairman of the IPL I created the tournament, while the Treasurer operated the accounting process and at all times, only did so following approval by the Secretary. It has been standard practice for the BCCI that all Fema compliances and RBI approvals are required to be actioned from the Treasurer?s office but in turn all decisions and approvals in respect of the IPL, which had any financial implication, or required the drawing or disbursing of funds - including RBI approvals - were taken by the then Secretary. For the record, I had no transactional mandate, nor any cheque signing powers.

"So these are the salient points I have reflected in my reply to the ED. It is important for me to explain the matter publicly because on 15th September, the BCCI meets in Chennai when they will apparently discuss the issue of changing the constitution to allow longer terms for officials - including of course, those currently in office. That meeting will take place under a cloud of issues that the cricket fans of India are awaiting answers to. It?s up to you to work out wether or not, they deserve your patience any longer."

Modi adds that the BCCI meets in Chennai next weekend, knowing that it has many problems to solve and the list appears to be getting longer and longer by the day. "The Deccan Chargers issue is the latest problem that?s dragging the IPL through the mud, but as well as that, sponsors are fleeing and new partners appear reticent to jump on board a ship that the beleaguered crew is finding harder and harder to steer."

MUMBAI: Mumbai-based club RN Sports Club, backed by a celebrity and a businessman, is willing to purchase the Deccan chargers team outright and bypass the bidding process.

The club located in South Mumbai is willing to pay Rs 9-11 billion for the team and will have a meeting with Deccan Chronicle tomorrow.

According to the club?s marketing head Ankush Tripathi, the BCCI has also been informed of the intention.

"There is a clause in the bid document which allows a party to buy the franchise if the owners agree. We do not want to go through the bid process. RN Sports Club management is constantly in conversations with the BCCI and the Deccan Chargers management for this deal," he tells Indiantelevision.com.

Tripathy believes the breakeven period can be achieved in three years. "The team will retain the same name and be based in Hyderabad. As per the terms in the bid document, this cannot be changed," he says.

The club?s promoter is Vijay Barhate. The aim of R.N. Sports club is to promote cricket. "We have been wanting to purchase an IPL team since IPL-4, as we already conduct various successful talent hunt camps at an all India school level. We have also done talent hunt camps aboard, We have cricket coaching centres in several places including Mumbai, Pune and Nagpur. We also have cricket academies in Mumbai. The aim of purchasing our own team is to promote the young cricketers of nation."

Interestingly R.N. Sports Club had a deal with Rajasthan Royals for running a talent hunt. Tripathi says that the MoU expired and so the club chose not to renew it. Earlier Rajasthan Royals had said that it had terminated the deal over non payment of dues which Tripathi flatly denied. For him, owning a franchise is the next step.

Other names doing the rounds who could bid for the franchise include Videcon, Adani Group and former Satyam COO Srini Raju who is now Peepul Capital co-founder, chairman.