India’s Enforcement Directorate (ED), the country’s top financial watchdog, has issued a show cause notice against the Board of Control for Cricket in India, Indian Premier League, broadcasters and agencies in relation to a media-rights deal agreed in the founding years of the Twenty20 tournament.
According to multiple reports, the notices have been issued to close to 10 individuals and entities, who include N Srinivasan, currently sidelined as president of the BCCI; then IPL chairman Lalit Modi; the league’s chief operating officer Sundar Raman; Manjit Singh, chief executive of Sony-owned Indian broadcaster Multi Screen Media; Paul Manning, legal counsel for the IMG agency; and other directors of the World Sport Group agency and MSM.
The notices have been issued for alleged contravention of foreign exchange laws in awarding a media rights contract in 2009. The ED has accused all parties of fraudulently creating an asset worth Rs4.25bn (€61m/$69m) outside India under the guise of a facilitation fee.
The IndianTelevision.com website said the ED has issued the final notices after which all parties are allowed to appeal against the order within a period of 45 days or pay the Rs4.25bn sum cited in the notice.
In 2008, ahead of the inaugural season of the IPL, the BCCI awarded the league’s media rights to World Sport Group under a 10-year deal worth $918m. In the same year, WSG also signed a deal with MSM to make Sony the league’s official broadcaster. The contract was replaced a year later with a nine-year deal where MSM paid $1.63bn.
IndianTelevision.com said that the ED commenced its investigation in 2009 and began a probe under the Foreign Exchange Management Act to investigate allegations that payment of a Rs4.25bn facilitation fee by MSM Singapore to WSG Mauritius was made in an allegedly unauthorised manner.