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Rediff.com  » Sports » MSM sues WSG to recover IPL payment

MSM sues WSG to recover IPL payment

June 25, 2010 21:44 IST

The Indian Premier League's broadcast rights holders MSM Satellite (Singapore), which has entered into an amended agreement with the Board of Control for Cricket in India, has filed a suit against Mauritius-based World Sport Group in the Bombay high court to recover facilitation fee of Rs 125 crore from the latter.

This follows the BCCI's successful contention that the IPL broadcast rights were exclusively with the Board "immediately prior to and at the time the grant of the rights by BCCI to MSMS," said the Singapore-based firm, in a media statement.

"The BCCI has disclosed certain facts, hitherto not known to MSMS that confirm that the broadcast rights were exclusively with it (the BCCI) immediately prior to and at the time of the grant of the rights by BCCI to MSMS. As such, the BCCI also stated that all monies expended by MSMS for the MRLA (including the facilitation fee) should be paid to the BCCI," the statement added.

In the light of these facts MSMS has cancelled the payment of Rs 300 crore in eight instalments spread over the next seven years to WSG and also filed the suit to recover Rs 125 crore which has already been paid to the latter as "facilitation fee".

"In light of these new facts MSMS has cancelled all future payment demands that WSG may make -- MSMS was due to pay the balance of Rs 300 crores in eight installments spread over the next seven years of the contract and has initiated legal action in India with a view to claiming back the payments so far made of Rs 125 crores.

"A suit for recovery of monies already paid to WSG and for suitable declarations has been filed in the Hon'ble High Court of Bombay," the company, which holds the IPL broadcast rights for the sub-continent, said.

MSMS had been in discussions with the BCCI regarding the issue of the IPL Media Rights License that had come under the scanner of government authorities.

The company, however, defended its action saying there was no impropriety in making the initial payment to WSG on the basis of representations made then and that it had acted in good faith at all times.

"MSMS categorically denies any impropriety in making the initial payments to WSG relying on representations made to us at that particular point in time.

"MSMS has acted at all times in good faith, with impeccable integrity and the highest ethical standards of corporate practice and in compliance with all applicable laws which cover all our officers," the statement said.

The company said it looked up to build a long-term relationship with BCCI.

"We look forward to continuing to build our long-term relationship with the BCCI and wish to reiterate our long-term commitment to Indian cricket," the statement added.

The IPL Governing Council, that met on Friday morning, had approved the amended media rights agreement with MSMS, said BCCI secretary N Srinivasan.

The BCCI successfully contended that the Rs 425 crore facilitation fee paid by MSMS to WSG rightfully belonged to the Board, the Board secretary said.

Srinivasan also said MSM, who have agreed to pay Rs 300 crore to BCCI, were taking steps to recover the balance amount of Rs 125 crore from WSG and, once this is done, this amount too would be handed over to the BCCI.

"Today, the Governing Council-IPL had approved an amended Media Rights Agreement with MSM Satellite (Singapore) Pte. Ltd. in which MSM would agree to pay the balance payable under the Facilitation Fee Agreement to the BCCI," he said.

"Thus, they have agreed to pay Rs 300 crore as part of the Rights fee to BCCI. MSM Satellite (Singapore) are taking steps to recover Rs 125 crore already paid to WSG Mauritius and on recovery, will pay the same to BCCI," Srinivasan said.

The Board had contended that once it became aware of the Rs 425 crore payment by MSM to WSG, they informed MSM it was "an improper payment", according to Srinivasan.

"M/s. MSM Satellite (Singapore) Pte. Ltd., the Media Rights holders for Sub-continent, had agreed vide an agreement dated 25.3.2010 to pay Facilitation Fee of Rs 425 crore to WSG Mauritius Ltd. On becoming aware of this, BCCI contended that this money belonged to the Board and should have been part of the Rights fee," Srinivasan said.

"BCCI had also informed MSM Satellite (Singapore) Pte. Ltd. that this was improper payment. MSM Satellite agreed to pay the said amount to BCCI as part of the Rights Fees," the BCCI secretary added.

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