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Bid was transparent and in compliance with norms: Rajasthan Royals

Source: PTI
April 27, 2010 14:02 IST
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Stung by allegations of irregularities in their initial bid, Rajasthan Royals on Tuesday insisted that the consortium neither flouted any norms nor hid any information from the BCCI about its shareholding pattern.

Claiming that their bid was in complete compliance with the BCCI and IPL guidelines, Rajasthan revealed their shareholding in which a majority stake of 44.2 per cent is held by Suresh Chellaram, the brother-in-law of suspended IPL chief Lalit Modi.

The team stated that their bid consortium was led by the UK-based Emerging Media (IPL) Ltd. and denied BCCI chief Shashank Manohar's allegation that the bidders' identity was not known.

"The other entities in the consortium were disclosed in the bid submission documents," the statement read.

"The current shareholders of EM Sporting Holdings Limited, who all have multiple business interests and independent means, are as follows: Emerging Media (IPL) Ltd (Manoj Badale - 32.4per cent), Tresco International Ltd (Suresh Chellaram Family - 44.2 per cent), Blue Water Estate Ltd (Lachlan Murdoch - 11.7 per cent) and Kuki Investments Ltd (Raj Kundra & Family - 11.7 per cent). There are no other shareholders," it added.

Rajasthan team owners said the revelation of the shareholding pattern is meant to clarify "certain misconceptions about the franchise, which have been raised through the media."

The team rejected suggestions that the Rajasthan bid flouted norms. "The Rajasthan Royals franchise bid was successful, with full compliance of BCCI guidelines, in a process conducted with the committee members of BCCI in January 2008. Full details of the consortium bid structure and the way the company would be set up were contained in the original submission to the BCCI in January 2008," the team said.

"The structure has been completely transparent and in accordance with regulatory guidelines ever since. The corporate structure was established in accordance with the details provided in the bid submission shortly after the bid. It was not established prior to the bid, as we obviously did not know if the bid would be successful," it added.

The team said that Indian company Jaipur IPL Cricket Pvt Ltd. was incorporated only in 2008 but the BCCI was kept abreast about all the developments.

"On March 8, 2008, an Indian company Jaipur IPL Cricket Pvt Ltd was incorporated, as detailed in the bid submission. We then executed the franchise agreement on 14 April 2008.

"The ownership of the consortium did not change between the award of the bid on 23 January 2008 and the signing of the franchise agreement on 14 April 2008," the team asserted.

Rajasthan said some stake was sold to Kundra to diversify the ownership base.

"As part of our strategy to broaden our shareholder base, in February 2009 Kuki Investments Ltd (Raj Kundra and Family) acquired an 11.7% stake in EM Sporting Holdings Limited, the parent company of Jaipur IPL Cricket Pvt Ltd, which was fully disclosed to the BCCI/IPL," the team stated.

As for the five per cent transaction fee that was to be given to the BCCI for the transfer of the shares, Rajasthan said it had asked the board about the amount but has not got any response yet.

"According to the BCCI/IPL rules, the IPL was entitled to 5% of the increase in the pro-rata value of the franchise. In February 2009 the Rajasthan Royals contacted the BCCI to agree the precise definition, to agree the amount that needed to be paid, and we are still awaiting a response," it said.

The team also denied allegations of violating Foreign Exchange related laws.

"In accordance with regulatory filings, we subsequently volunteered to make a full disclosure application (in July 2009) through the Government's FIPB (Foreign Investment Promotion Board) process.

"The relevant information submitted in that application, including details of the structure, now appears to be publicly available. Our application was not initially accepted due to a miscommunication of submission timings. Our subsequent application in January 2010 has not been rejected," it stated.

"We are well advanced towards fulfilling the procedural steps and additional information requests necessary to satisfy the FIPB," it added.

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