IPL probe widened, search operations across India (Roundup)

NEW DELHI - The probe into the financial deals of the Indian Premier League (IPL) was broadened Wednesday with search operations on three of its event management and broadcast firms in Mumbai and frachises across the country. A case was also registered to probe foreign exchange violations by the franchises.

Officers of the Directorate of Income Tax Investigation swept through the premises of IPL franchises in Kolkata, Mumbai, Pune, Kochi, Bangalore, Hyderabad, Delhi and Chandigarh.

The day started with a team of 50 officials of the directorate swooping on the offices of Multi Screen Media, World Sports Group and Pat Magnarella Management in Bandra, Khar and Malad suburbs of northwest Mumbai.

Earlier called Sony Entertainment Television, Multi Screen Media has the telecast rights for the IPL T20 cricketing extravaganza for 10 years from 2008 while World Sports Group acquired the global media rights for 10 years for over $1.5 billion.

Pat Magnarella Management is a full-service management, branding and marketing services company, which in the past specialised in the music business and later made a foray into sports as well, officials said.

Notices were later served on Kings XI Punjab to reveal the names of all its owners and specify the exact shareholding of each member including the source of money, officials explained.

“Similar notices will be served on other franchises,” a senior official said.

He said the Mumbai Indians franchise, IndiaWin Sports, had filed the details of equity holding, as per which 98.3 percent is held by Mukesh Ambani-led Reliance Industrial Investments and Holdings and the remaining 1.7 percent by Teesta Retail.

The multiple probes follow an ugly spat between IPL chief Lalit Modi and Minister of State for External Affairs Shashi Tharoor over the involvement of the latter’s friend Sunanda Pushkar in the Kochi franchise. Pushkar gave up her sweat equity in the franchise and Tharoor quit the government, triggering an unprecedented investigation into any Indian sporting body.

In the capital, another investigative wing of the finance ministry, the Directorate of Enforcement, registered a preliminary case against the IPL and its franchises to probe possible violations of foreign exchange rules and regulations.

The case was registered under the provisions of the Foreign Exchange Management Act in a bid to help the directorate’s officers to search the premises of suspected people, seize incriminating material and hold enquiries, officials said.

The move was prompted by information that huge funds have found their way into IPL from international tax havens. The probe would go into the root of the IPL finances from dubious sources, officials said.

A probe by the tax department had first started with the Kochi franchise of IPL Wednesday. A day later, income tax department officials visited various offices of the IPL in Mumbai and questioned its chief Lalit Modi.

Based on the documents collected, the tax probe was then extended to other cities as well, following which all the wings of the finance ministry were roped in for parallel investigations.

Finance ministry officials said their main concern was whether ill-gotten money stashed abroad was being brought back into India and whether there was tax evasion by IPL and its franchises.

The question of free equity to some directors of franchises is also being probed.

The 10 franchises under scrutiny are Kochi’s Rendezvous Sports, Pune’s Sahara group, Mumbai Indians, Delhi Daredevils, Kolkata Knight Riders, Royal Challengers Bangalore, Deccan Chargers, Chennai Super Kings, Rajasthan Royals and Kings XI Punjab.