ON THE morning of March 21, a Cessna Citation II aircraft took off at 10.08 am for Chennai from the private base at Mumbai’s Chhatrapati Shivaji airport, carrying three passengers. On board were Venugopal Dhoot, the chairman of the Videocon group, Manoj Jain — first cousin of Suresh Chellaram (a Nigeria-based businessman and IPL commissioner Lalit Modi’s brother-in-law) — and his wife Reema, daughter of the late Bollywood actor Raj Kapoor.
The flight returned at 3.33 pm to Mumbai. By that time, the bids for two new Indian Premier League (IPL) teams had closed and Videocon had lost the race. An enraged Reema Jain — it is reliably learnt — told her friends at a party that evening about the great miss.
And it was then that all hell broke loose across the country.
Cabinet ministers got involved, power brokers started buzzing in the Indian capital and the Blackberry of the IPL’s top man began to tweet. Seven tweets later, the life and fortunes of Modi were in total disarray. Cricket writers have compared Modi’s tweet troubles to how a fire hydrant caused the legendary golfer Tiger Wood’s personal life to come under intense public scrutiny and have remarked on how the man who styled himself as the cricket’s answer to Formula One czar Bernie Eccleston dug himself into a gigantic hole.
Now that he stands suspended as IPL commissioner on charges as serious as betting and money laundering, Modi is desperately trying to buy peace. On the afternoon of April 15, he quietly drove to the office of Mukesh Ambani, chairman of Reliance Industries and owner of the Mumbai Indians franchise. Modi, for obvious reasons, tried hard during the hour-long conversation to convince India’s richest, and arguably most influential, man that he was being victimised and that he needed help.
Nothing happened. Modi was curtly told that if investments into the IPL teams were clean he had nothing to worry about. And if the investment routes were dubious, then he could be in trouble. Those who saw Modi say the creator of the IPL was visibly nervous.
Within days, he was grilled extensively by Income Tax and Enforcement Directorate (ED) officials. Modi again rushed to the senior Ambani. This time, the television cameras picked up his trail and put it on the band reserved for breaking news. But this time too, nothing happened, except for some statements by IPL team owners like Vijay Mallya, Shilpa Shetty and Shah Rukh Khan, who spoke out in his support and argued that it was the biggest sporting brand India had ever created.
Also jumping into the fray was his father, KK Modi, who told some journalists in Delhi that his son should create a league of his own and forget the BCCI. For some strange reason, no one asked him where the players would come from. If Modi could sink the boat of Subhash Chandra of Zee Telefilms who had started the Indian Cricket League (ICL) by banning current Test players from participating, the same could happen to the proposed Modi League, right? In short, the message for Modi was simple. He had to prove he was clean. And that, say those in the know, was the reason why India’s most powerful industrialist didn’t want to annoy the government on a matter where corruption is a central issue. Come clean in the matter, Modi was told in clear-cut terms.
BUT IT is not easy for the IPL czar. ED and IT officials probing him have gathered conclusive evidence on the source and funding of the yacht that he paid for and ordered from Malta two years ago. The vessel was to be delivered soon, though it was not immediately clear to ED and IT officials if Modi wanted to register the vessel in Dubai, which guarantees a tax benefit. And it’s not just the vessel — Modi’s aircraft is also under the scanner, ostensibly because the ED has evidence that it was used by the chief minister of a northern Indian state with whom he was closely linked.
There are other tensions for Modi and his friends. The ED and IT are probing if Modi told selective bidders how much to bid and win during the first team auction in 2008. Consider the case of the 2008 champions, the Rajasthan Royals. The difference in bid amounts of the winner and loser was $300,000 (a mere 0.45 percent of the winning bid of $67 million). The ED is now probing if the winning consortium — Chellaram is its major promoter — knew the amount its competitor had bid. The ED has every reason to be suspicious because of the reported improprieties committed during the auctions in March.
High on the ED radar is the $80 million amount paid by Multi Screen Media (MSM), formerly Sony Entertainment, to World Sports Group (WSG) as “facilitation” fees to withdraw from the telecast rights contract. WSG had bagged the rights for $918 million for a decade, but the contract was cancelled and a new one signed between IPL and MSM for $1.69 billion for a nine-year period. And MSM paid $80 million to WSG.
ED officials are probing whether $25 million of the $80 million paid by MSM to WSG was routed into the illegal accounts of Modi, his associates and political beneficiaries and if Modi used this money to buy his corporate jet through a Cayman Islands company. Interestingly, many of Modi’s private assets are owned through overseas entities incorporated in the British Virgin Islands and Cayman Islands. “And it is the same pattern many IPL teams are following,” sources say.
Rajasthan Royals is fully owned by Jaipur IPL Cricket Private Limited, which in turn is wholly owned by the Mauritius-based EM Sports Holdings Ltd. EM Sports is 44.15 percent held by Tresco International Ltd of the British Virgin Islands, which is finally held by the Chellarams through two British Virgin Islands’ entities: Kabu Holdings and Westfield Consultants.
ANOTHER 11.74 percent stake in EM Sports is owned by the Hong Kong-based Blue Water Estate Ltd, controlled by Lachlan Murdoch, son of Rupert Murdoch. The family of Raj Kundra owns 11.70 percent through Kuki Investments, headquartered in the Bahamas. The remaining stake in EM Sports is held by Manoj Badale’s Emerging Media, based in the UK.
“A check is on to trace whether black money was routed out through hawala and taken back as legitimate funding through such complex holding structures and whether approvals were obtained,” the sources further say.
Modi knows he is under pressure and has got a top Delhi lobbyist to broker peace. On the afternoon of April 28, he visited Ram Jethmalani and hired him to fight what he knows will be a longdrawn courtroom battle.
But somehow it is difficult for him to cut much ice, both in political circles and also among the powerful Delhi media. Sources say he rubbed the crown prince of India’s largest newspaper chain the wrong way when his men unceremoniously unseated him from a box in Mumbai during an IPL match. The owners of Delhi’s other big daily have irreconcilable family-related differences with Modi. Even worse, the flashy IPL guru last week called the editor of another influential national daily and wanted to know “who was that twit” trying to dig up details of his yacht. The person concerned happened to be the daily’s head of investigations. As might be expected, the editor slammed the phone on Indian cricket’s man in hurry.
And none of this is helping him.
As the scam gets murkier, it is reliably learnt that Prime Minister Manmohan Singh is being briefed every evening by the heads of investigating agencies like the Intelligence Bureau, the IT, the ED — which deals with forex transactions — and the Directorate of Revenue Intelligence (DRI). “The agencies are buzzing with lots of information from India and abroad. We hope to get concrete evidence soon against some key players in IPL,” a source in the Prime Minister’s Office (PMO) told TEHELKA.
LIKE EVERYTHING else, this story also has its political overtones. Senior Congress politicians following the scandal are unanimous in their thinking that if ministers — especially those from its electoral ally, the Nationalist Congress Party — are found corrupt, they must come clean. The indications are there for all to see as a host of others are being slowly, yet steadily, pulled into the investigation dragnet along with Modi.
Consider the case of Sadanand Sule, the husband of Supriya Sule, Union Minister for Agriculture, Food and Consumer Affairs Sharad Pawar’s daughter. Supriya Sule initially said her family didn’t have any investments in the IPL but later, reluctantly, acknowledged that her husband had a 10 percent stake in MSM, which holds the television broadcast rights to all IPL matches, through a power of attorney given to him by his father, BR Sule. “A probe is on to find out whether Sule was offered a stake in the franchise that Videocon was hoping to get. We need to find the missing file and sort this one out,” the sources add.
That is one part of the investigation. ED officials say a lot of information not directly connected with the IPL has also come up during the probe. One establishes a direct link between NCP leader and Civil Aviation Minister Praful Patel and Utsav Parekh, the father-in-law of his daughter Niyati.