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IPL probe limited to money trail

April 24, 2010 03:53 IST

The Union government will limit its investigations to financial irregularities and tax violations by the Indian Premier League (IPL), its 10 franchisees, as well as the broadcaster. The government does not want to interfere in the functioning of existing sports institutions, a top functionary of the finance ministry said.

"Our investigation will look into whether there were any tax violations or other financial irregularities on the part of the franchisees, IPL or the broadcaster. It is not the business of government to organise cricket matches and to get into related sporting and entertainment business," said the official.

"The government's responsibility is to ensure that all business entities and organisations function according to the law of the land. If there is anything illegal, we will take action. Other than that, the government should not get into the business of sport," added the official.

The statement comes after income tax officials "surveyed" the premises of all the 10 franchisees, which include the two new ones (Sahara and Rendezvous Sports), and the offices of World Sports Group and Multi Screen Media (formerly Sony SET Max), apart from the offices of IPL and its commissioner Lalit Modi's premises. The income tax department has been looking into details of the shareholding patterns, the financial transactions, the bidding process and payments to players to see if any rules were broken.

Meanwhile, it has emerged that there are plans to add two more IPL franchises to the existing 10, a move which caused consternation in the franchisees.

Says a promoter of one of the franchisees: "When we went to the last franchisee meeting  we were told there would be two additional teams but the number of games would also increase and so would the number of days of cricket. But, now the IPL management has floated an idea that two more teams could be added, and this has raised concerns for our valuations".

Other franchisees say the move would have been difficult to implement in any case, as IPL only has a 75-day window to hold the tournament in the international cricket calendar. The ongoing IPL 3 is set to run for 45 days, in which 60 matches are being played. With two new franchisees, the number of matches will go up to 94, and the tournament will be extended to 60 days.

Lalit Modi did not reply to an SMS on this issue.

Meanwhile, agency reports said Modi "appears to have dropped plans to move court against the Monday meeting of the (IPL) Governing Council." He wrote to the brass of Board of Control for Cricket in India for five days time to answer all questions. "I have worked for you for five years... Give me just five days to prepare answers to all the questions," Modi told BCCI, sources close to him said.

Despite the mounting pressure from opposition parties, the government has not agreed to form a joint parliamentary committee (JPC) to probe IPL irregularities. Proceedings in both houses were stalled today by opposition parties demanding a JPC.

The Congress core committee met in the evening to discuss the issue. According to sources, Finance Minister Pranab Mukherjee and Home Minister P Chidambaram strongly objected to the formation of a JPC on the ground that it would not yield significant result.

The top leaders also pointed out that after the Tehelka scam, where senior leaders of the National Democratic Alliance (including then BJP president Bangaru Lakshman) were caught on spycams allegedly negotiating bribes, the NDA government didn't order any JPC and left it to other modes of enquiry.

Government managers feel that forming a JPC will not serve any purpose for a few reasons. The committee generally takes a few years to arrive at its conclusions and this long time gap will place the urgent need to fix things in the most popular sports event in cold storage. "There is a pressing need to plug the loopholes without any further delay. By the time the JPC gives its report, two more IPL tournaments will be over and the perpetrators will find escape routes," said a senior leader of the Congress.

The income tax investigations are already on full swing and the reports have started reaching the Finance Ministry. A senior leader of the ruling United Progressive Alliance (UPA) said, the investigative agencies have already started gathering inputs and details of frauds so there is no need for a separate JPC to be formed and re-investigate the issue.

Government managers averse to a JPC are also citing the previous experiences with JPCs, which show that they haven't been able to achieve results.

The ruling party is also arguing that as probes over money laundering and income tax evasions are technical issues, parliamentarians may not be in a position to explore all aspects of the issue and tax sleuths are better-placed to do the probe.

But as Agriculture Minister Sharad Pawar and Civil Aviation minister Praful Patel's names have surfaced in the IPL controversy, the opposition today expressed doubts over the success of the probe. Leader of Opposition in Lok Sabha Sushma Swaraj said, "a JPC probe should be ordered to save the dignity of the House and to bring to light the whole issue."  

"The way senior ministers have also come in the ambit of the controversy, I fear the government will not be able to do an effective probe. The government agencies can't probe properly because the government will have to save the alliance," Swaraj said.

Supporting her, JD(U) leader Sharad Yadav alleged that illegal money from Mauritius and Swiss banks had been invested in IPL, and a JPC is required to probe all aspects of the tournament.    

CPI-M leader Basudeb Acharya pointed out that a JPC probe was ordered in the 1991 securities scam by then P V Narasimha Rao government. Manmohan Singh, then finance minister and now the Prime Minister, should order a similar probe.

Sonia Gandhi's political secretary and a member of the core committee, Ahmed Patel, told reporters: "The government will decided if a JPC needs to be formed. As Pranabda (Pranab Mukherjee) has told the Lok Sabha, he will convey the sentiments of the House to the Prime Minister."

Sources in the core committee also told Business Standard that the Congress will also talk to its allies before taking an official decision on the demand for JPC.

BS Reporters