A volcanic week…

The last one week has been rather volcanic, eruptions of gargantuan proportions have spewed ashes and flames all around. The smoke is thick and visibility has been drastically reduced to less than five metres. Our eyes continue to smart and burn, the breathing is getting a lot heavier as dust and ash continues to fling itself  on us. As we continue to choke on one scam after another, we yearn for a breather and long for a respite from the fire and ice. Tharoor resigned last night. Yes, we expected him to especially after the high command sat around a crackling fire and tossed bits and pieces of a highly inflammable Tharoor and controversy ridden IPL into it. Tharoor was doomed, he did not get an auspicious start when he ventured into an unfamiliar domain a year back.With time he blanketed himself in controversies of his own making and blasted himself into space. Pushkar offering to give up her stake was a meek way of surrendering and showcasing to the world that Tharoor was no hapless victim.( A bit more on my take on Tharoor click here )

Pushkar got sweat equity, equity in lieu of salary and for a beautician to be awarded seventy crores sounded a bit too far-fetched from day one. Without sounding a wee bit sarcastic, even the most successful Shahnaz Hussain has to sweat it out for a good long sweaty infinite time to make seventy crores performing facials and perming hair. Yes, it depends on whose face is getting the facial though, a handsome face like Tharoor’s could cut down time quite drastically. Tharoor’s love for cricket, money and Pushkar is as explosive as Modi’s love of power and money. Modi seems to be stuck on the high walls like Spiderman right now, dodging IT officials and baiting unsuspecting victims and taking down suspecting victims with him. It will be interesting how long Modi continues to play Spiderman. Mallya must have choked on his beer when the IT sleuths were quizzing his step daughter who is conveniently associated with Modi in the IPL and reiterates my stand on the Indian parivar league claim. It will be a while before Mallya starts singing ” ooh la la la la le oh”, the fire and ice at the IPL road show will keep him a bit quiet on the domestic front. Not to forget his planes are now unable to fly over Europe as yet, Mallya has had a tough week. There is also a real volcano that is spewing over Iceland which has forced airlines worldwide into losses running into the millions daily.

Modi seems to be in the hot seat with the IT sleuths sniffing out betting involvement and match fixing. I am thankful I have not wasted my precious time on fanatically following the IPL. I had commented on this click here

A complete report on Mr Modi in the hot seat

‘Mr Lalit Modi has had a trail of failed ventures and defaults till four years back but has a lifestyle now that includes a private jet, a luxury yacht and a fleet of Mercedes S class and BMW cars all acquired in the last three years.’

Thus opens a highly confidential and explosive report by the income-tax department that has been in the possession of the government for six months now but formed the basis of any action only on Thursday evening after a raging controversy over secret ownerships and sweetheart deals in the Indian Premier League, or IPL, stalled both houses of Parliament.

Highly-placed sources in the I-T department and the Congress party told ET that Mr Modi has been on the government radar for quite sometime. The alleged opaqueness with which he conducted the multi-billion dollar cricket tournament and the manner in which he took on home minister P Chidambaram in 2009 seem to have resulted in a detailed enquiry into his activities by the I-T department.

The report, whose contents were described to ET reporters, paints a startling picture of the alleged activities of the controversial IPL commissioner, ranging from his manipulation of land deals in Rajasthan and the existence of a maze of shell companies and offshore entities used to route payments and equity stakes worth hundreds of crores of rupees. The report also makes the startling allegation that Mr Modi—through his associates—was ‘involved’ in ‘betting’, while “insider information and outcome fixing of IPL matches were hinted at”. The six-month-old report, which I-T sleuths maintain is the basis of current investigations, is obviously referring to betting and insider information in the first two IPL tournaments, not the current one.

In preparing the report, investigators seem to have accessed his email account, confidential conversations on a UK-registered cell phone number and regulatory filings from across the globe, from Mauritius to Ireland to the US. Some other Indian cell phone numbers have also been unearthed which the I-T sleuths claim Mr Modi “keeps changing”. The report alleges that Mr Modi is “apparently deeply embroiled in both generation of black money, money laundering, betting in cricket (match fixing of certain IPL matches)”.

An email sent to Lalit Modi remained unanswered on Sunday evening. His lawyer was also sent the same email. A number of his associates named in the report might come under the scanner as the investigation, which started with visits to Mr Modi’s offices on Thursday evening, progresses through the coming weeks. Even though the report detailed the premises the tax department wanted to raid and sought permission to go ahead, political clearance was not granted until junior minister for external affairs Shashi Tharoor stepped into IPL’s murky quicksand and with him dragged the government and the Congress party into one of the biggest scandals in recent times.

“This is not just a Pandora’s box but a Pandora’s chest that has been opened,” said a senior Congress leader who has knowledge of the report. “This will indict everyone,” he said, speaking on condition of anonymity. When contacted about the contents of this report, the official spokesperson of Central Board of Direct Taxes (CBDT), Shishir Jha, SMSed a terse ‘no comment’ to the ET reporter.

The report refers to one Deepa Raizada as a close associate of Mr Modi “who handles his cross-border transactions and offshore companies”. Ms Raizada is CEO of Modi Entertainment Networks and has worked at the firm for nearly 10 years, according to two persons who work at the company. The I-T report says she has previously worked with Equity Associates, a boutique investment firm based out of Ontario, Canada. Ms Raizada did not take calls made on her mobile number and did not respond to a text message from the ET reporter. Her home phone remained unreachable through Sunday and an email sent to an id listed under her name on the Modi Group’s website bounced.

A league of extraordinary betting?

What will come as most disturbing to cricket fans is that the report suggests pervasive betting and outcome fixing in the IPL. According to the report, Modi himself is involved through Samir Thukral, a Delhi-based “page 3 personality” with an “opulent lifestyle despite having no apparent source of income”.

Mr Thukral is a permanent fixture at all IPL matches with VIP access, the report says, adding that he “carries out the betting on behalf of Lalit Modi”. I-T sleuths are investigating “a lot of matches of IPL, especially involving the three teams in which Modi has an interest”. The mobile number listed in the report against Thukral actually belongs to Samir Thukral, a co-founder of Shree Capital Advisors, a Delhi-based private equity advisory firm.

His bio-data says he has interests in online lottery business and real estate. “I have known Lalit for 30 years and he is a good friend. And yes, of course, I went to South Africa for IPL matches, but these are wild and baseless allegations,” Mr Thukral told ET. On Sunday afternoon, Rahul Nayar, founder of Shree Capital Advisors, told ET that Mr Thukral doesn’t work for him anymore. He refused to answer other queries and hung up on ET reporters. Mr Thukral, however, maintained that he is the co-promoter of Shree Capital Advisors.

Ownership issues

The report alleges that Modi has silent ownership in three IPL teams—Rajasthan Royals, Kolkata Knight Riders and Kings XI Punjab. According to the report, Rajasthan Royals’ owner Emerging Media is controlled by Manoj Badale, Mumbai Education Trust and Ranjit Thakre, a former employee of ITC Ltd. It says a 25% stake in the team is with “hidden owner” Suresh Chellaram, a Nigeria-based co-brother-in-law of Mr Modi. Manoj Badale did not respond to an email seeking comment from ET.

Incidentally, Rajasthan Royals won the first IPL tournament in 2008. The report also says Kolkata Knight Rider’s co-owner Jay Mehta, who is married to actor Juhi Chawla, is “partly fronting” for Lalit Modi. Industrialist Jay Mehta denies these allegations. According to an official response from KKR, the team is wholly-owned by actor Shah Rukh Khan and Mr Mehta and there are no other shareholders. “Kolkata Knight Riders is owned by Mr Shah Rukh Khan and The Sea Islands Ltd (a company incorporated in Mauritius), which is a wholly-owned subsidiary of Mehta International Ltd—the holding company of the Mehta Group. The shareholding pattern is as follows: Mr Shah Rukh Khan-55%; Sea Islands Ltd-45%. There are no other investors in Knight Riders Sports Private Limited,” said a spokesperson of KKR.

The report claims that Modi owns a stake in Kings XI Punjab through Akash Arora, owner of Delhi-based BPO Netlink Blue. Arora is a part-owner of the team along with Ness Wadia and Mohit Burman, according to the report. “Akash does not and has never owned a stake in our team,” said Mohit Burman. He, however, declined to categorically state that 100% of the team’s ownership rests solely with himself, Preity Zinta, Ness Wadia and Karan Paul.

Mohit’s younger brother, Gaurav Burman, who is married to Lalit Modi’s stepdaughter, told ET that he also owns a stake in the Mohali team. He volunteered this information while responding to allegations in the report that he is linked to Betfair, a UK firm that runs one of the world’s largest betting syndicates on the Internet. As readers of ET would know, betting is a legal activity in the UK. The report says that according to information contained in Modi’s email account, the IPL chairman is helping Betfair, which is seeking to enter the casino and hospitality business in India.

“Gaurav Burman is to receive equity on behalf of Lalit Modi,” the report says. “This is completely baseless, I have no links whatsoever with Betfair,” Gaurav Burman told ET. From Modi’s emails, the tax department also accessed details of a transaction relating to the purchase of a luxury yacht in Malta that is to be delivered in Mumbai or Dubai.

Conflicts of interest

WSG and IMG, two companies that received BCCI contracts, are both old business partners in Modi’s own businesses. Modi Entertainment Networks runs Fashion TV in India. IMG did business with Fashion TV for years before it won the contract for managing IPL. IMG, a powerful global firm with interests in sports, media and entertainment, was to get 10% of IPL’s revenues as management fee. In July 2008, following murmurs that this was too sweet a deal, BCCI terminated the contract.

The two parties later renegotiated and IMG was back in the game with a substantially reduced fee.According to the report, WSG, which owns IPL’s overseas rights, was owed $2.5 million by Modi Entertainment Network from an earlier transaction over which Modi had lost litigation both in India and the UK. The report alleges that by awarding WSG rights at favourable terms, Modi was settling the old dues from his private business. Netlink Blue, whose owner Akash Arora is a part-owner of Kings XI Punjab, according to the report, is another firm that has received favourable BCCI contracts.

“The close links of Modi with Netlink are established through a series of emails wherein Lalit has illegally given Netlink live feeds of Australia-India series before BCCI president intervened and stopped this illegal sale of rights,” the report says. Sure enough, the favour is not without a quid pro quo. “From Netlink, a part of payoff is by way of a commitment to bail out Mr Modi’s sick venture Voyages TV through cash injection of Rs 8 crore in the form of equity,” the report says, citing emails that were available to I-T sleuths.

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18 Responses to “A volcanic week…”

  1. Brilliant piece by Pritish Nandy

    Follow The Money!Pritish Nandy, 19 April 2010, 11:49 AM IST The only advice I ever followed as a journalist is what Deep Throat told the two intrepid Washington Post reporters trying to track down Watergate. It was simple but has never failed me: Follow the money.

    In the Shashi Tharoor, Lalit Modi imbroglio, the media unfortunately ignored this sage advice. What began as a cheeky tweet ended up as a bloody political battle with the media turning from war correspondent to head hunter. Some hated Tharoor because they believed he did no work, was constantly on twitter. Others hated him because he had ignored political etiquette and flaunted his girlfriend openly. In any case, Tharoor’s not a typical Indian politician. He’s well educated, has spent many years abroad, is clever, articulate, well spoken and ambitious, having built a successful career in the UN which he gave up to pitch for the top job and lost. This means he’s a gambler too. He is young, by our political standards, which explains why despite his first rate credentials, he got a third rate junior minister’s job. The man who Manmohan Singh backed for the top UN job only got a rather lowly, sinecure position in his cabinet when he returned to India and joined politics. It’s a bit like Indira Nooyi being hired as Deputy General Manager in BSNL.

    Lalit Modi, on the other hand, has lived with scandal all his life. No, he was not arrested for drugs while studying in the US. He was arrested for criminal assault, if that’s any better. No, he was not the super CM of Rajasthan during Vasundhara Raje’s time, taking all the key business decisions. He was only her friend. No, he had no stake in the IPL apart from being its very successful Commissioner. If his friends and family had acquired stakes in various teams and highly profitable commercial rights, that was coincidental. That he’s brash, arrogant, full of himself for having built the biggest, richest, sleaziest, and most successful sports property of our time has made him an urban hero for the media which falls all over itself in singing paeans to him. One more year, and like Chatwal, he would have possibly got the Padma Bhushan. (Who knows, he still might.) No, not for bringing cricket into the new century, as his acolytes claim, but for reducing it to a farce and building a huge commercial edifice over it that he controls with an iron fist. Rumours of the IPL having its own betting syndicates and fixed matches are emerging. When you have a stake in three out of the eight teams playing the league, that’s not exactly tough to do.

    Lalit Modi is not just the IPL Commissioner. He is the IPL. Whether he works for himself or a political syndicate, no one knows as yet. No wonder he was furious when Tharoor gatecrashed his party and grabbed the Kochi franchise and, worse, took a leaf out of Modi’s own book and made his girlfriend a co-owner. There was only one problem. Modi’s a private businessman who reports to the BCCI, even though he behaves as if he owns Indian cricket. Tharoor is a public servant accountable to Parliament. The war between the two gave the Opposition a handle, threatened to bring the Government down. It was stoked by the media who have their own informers planted on every social networking site whose job is to keep a watch on what could become breaking news. Tharoor and Modi made it to the headlines in one shot. The rest is history. Channel TRPs soared. The IPL went trending on twitter while newspapers dug deeper and deeper into the story to keep it frontpage. By the end of it, Tharoor’s fate was sealed.

    It’s not a question of who’s right, who’s wrong. Public opinion’s against both. One for his indiscretions, his foolishness. The other for his hubris, his greed. Tharoor has already resigned. Sunanda has returned her sweat equity to team Kochi. Modi’s being investigated by income tax for his IPL deals and no longer looks as cocky as he once did. A forty fold increase in his income over one year has been tracked down. He paid Rs 32 lakh tax last year. This year he has paid Rs 11 crore advance tax, which makes his income well over Rs 40 crore. They are also zeroing in on some big deposits in Mauritius say newspapers and two union ministers who have invested in IPL teams benami. Both belong to the ruling alliance.

    This is where I return to Deep Throat’s advice: Follow the money. Indiscretions, tweets, girlfriends getting sweat equity may be improper. But they are not criminal. Now that Tharoor’s out, maybe we should stop equating Modi’s wrongdoings with his foolishness and instead track down the real crimes. That can be only done when we follow the money, not the fool. There’s no cash trail that leads to Pushkar or Tharoor. Those were only promises of gain. The actual cash trail leads to others. Let’s find out who they are.

  2. Take a look at the whois of iplt20.com , http://whois.domaintools.com/iplt20.com

    Great article btw.

    • Thanks Ninad and interesting link, I can see only Modi on it. I think IPL is counting it’s days.

      • I don’t think IPL will or should die out. It’s been very positive for many reasons, it’s great entertainment, terrific opportunity and experience for local players, i am guessing a lot many jobs created, foreign exchange through television rights etc. The corruption and scandals were there before the IPL and will continue to be there if it’s gone, in one form or the other. IPL is not the only way to turn black money into white, there are about hundred other ways. I am just hoping there is a good shake-up of the BCCI, which includes IPL and cricket at any level benefits from it.

    • Ninad – Thanks for your comment.I agree it has it’s merits but what I would like to see is the IPL revamped in it’s entirety and allows for greater public scrutiny. The existing teams , existing management everything must be regrouped, and the bidding process too must be on a transparent guideline. No One wants to see nationalization of IPL, but the existing structure is a farce!

      • Yes, that’s mainly the BCCI which has to be regulated, which is not the case at the moment. BCCI should be a transparent organization. As far as the team owners company structure is concerned, if its a public company like i think IndiaWin sports (owners of Mumbai Indians) is (as a wholly owned subsidiary of Reliance which is public), or like some teams are planning to go public, they have to be transparent. But if it’s a private company..I am not sure what rules apply.

      • Ninad – Yes,BCCI is trying to step aside from the IPL mess, it is all one big pot which needs to be cleaned.

  3. It would be a blessing for India and Masses over there if IPL is down the Drains. It sounds impossible with Top Political Guns like Sharad Pawar & some others having their vested interests into it. They certainly wouldn’t allow this bizarre money minting Circus to end just like that. They definitely find A Scapegoat and All shall be forgotten then where such naive and nincompoop masses are there to support such Ho Hum.

    • That is a fair point, will take a lot to bring it down but if the UPA govt wants to, it will. Again, depends on how many from the UPA govt are in it themselves. There are some benami ownerships doing the rounds..

  4. Shashishekhar M.Vyas Says:

    Sharmilaji,

    Again very informative & thought provoking ….And bold as ever !

    Modi will go. What about “others” ? Sharad Pawar is in no way be defined as Minister — forget about being Agricultural Minister.Draught & fate/karma alone to be blamed for pathetic conditions of poor farmers? And in the state to which he belongs !

    Rgds,

    S.M.Vyas

  5. Even though it has taken time to uncover Modi and his quick rise to fame & fortune, I hope that the I-T sleuths do not abandon this mid-way.

    Turning to Tharoor, I still find it difficult to understand how a man of his stature could fall from grace in such a short time. We had high hopes from Tharoor…

    Btw you may have seen his son, Ishan Tharoor’s name on the cover of the latest TIME for his well-researched article – Can Noynoy Save The Philippines? And, don’t miss to read in the same edition – One Night in Bangalore !!!

    • Veekay – Yes, lets hope the IT pressure is on, but I dont expect too much from the IT dept as well. Pity that Tharoor has fallen so quickly as compared to the Laloos of the world, but the guilty must fall and fall he did. Thanks for the update on the times article, will surely look it up. Ishaan I hear is as suave as his Dad.

  6. Anonymous Says:

    I actually never had enough knowledge about this issue.But one thing is certain now that IPL may find it difficult to survive in the upcoming year irrespective of the fact that Lalit Modi may join again or not.It is all because India’s early departure from the T20 WC has raised fingers towards the IPL.

    • Anonymous – Agree and good to see you back in action!

      • I tried to play some tricks with a fake email address.But it didn’t work.May be thats where you caught me right…..my email id……but you must have thought that who has commented on this very old post…….

        Now my clock is nearing 12.I must go through other posts.Today is the same date when I wrote last if you remember………SORRY……didn’t appear for so long :(…..but i knew that I had to one day 🙂

      • Thanks for your comments and getting back Salman!

  7. urban wear…

    A volcanic week… « Sharmila says……

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