Says Lalit Modi not authorised to enter into agreement; threatens civil and criminal proceedings
Faulting the $80 million ‘facilitation fee' agreement between World Sports Group (WSG-Mauritius Limited), (WSG-India Pvt. Ltd) and Lalit Modi, the Board of Control for Cricket in India ( BCCI) on Monday invalidated all IPL agreements signed with WSG (India) Pvt. Ltd in January 2008.
The BCCI has claimed that Mr. Modi was not authorised to enter into an agreement, particularly when the television rights for the Indian sub-continent was vested back with the BCCI on March 15, 2009.
“Due to the all pervasive fraud that you [WSG, India] have perpetrated on the BCCI, we hereby rescind the subject agreement with immediate effect. All the rights purportedly licensed to you hitherto shall stand vested back with the BCCI and you cannot deal with these rights in any manner. We reserve our rights to initiate both civil and criminal proceedings against you for fraud and wrongful losses at your costs and consequences,” said N. Srinivasan, Secretary, BCCI, in a letter to WSG, India.
‘Vitiated by fraud'
Initially WSG (India) held the international television, global radio, mobile and internet rights for IPL season 6 to 10 and also the Global Media Rights for IPL season 6 to 10. Then on March 14, 2009, and before the IPL season 2 in South Africa, the BCCI terminated the agreement with Multi Screen Media (MSM) and awarded the Indian sub-continent television rights to WSG, Mauritius.
In order to secure the rights, because of commercial interests, MSM worked out an arrangement with WSG, Mauritius, guaranteeing a facilitation fee of $80 million (approximately Rs. 435 crore).
The BCCI has reiterated the point that it had no knowledge of the facilitation fee agreement between MSM (Satellite) Pvt Ltd and WSG (Mauritius). In his letter to Venu Nair of WSG (India), Mr. Srinivasan said: “The BCCI has very recently noticed that the said agreement (IPL Media Rights Agreement dated 25th March 2009 for the Indian sub-continent) purportedly executed by Mr. Lalit Modi, is in fact, a document which is totally vitiated by fraud perpetrated by you (WSG, India) in conspiracy with WSG, Mauritius Limited and Mr. Lalit Modi. The agreement is, on the face of it, vitiated by fraud.''
The BCCI has pointed out to WSG (India) that in the document ‘Deed for the provision of facilitation services', its affiliate, WSG, Mauritius, has falsely represented that there is an IPL license agreement between the BCCI and WSG, Mauritius, dated 23 March 2009.
It goes on to say, “the representation has been made falsely with your [WSG, India] knowledge and with your [WSG, India] connivance to defraud the BCCI of monies which ought to have been legally received by the BCCI.”
In yet another clause of the agreement between BCCI and WSG, India there exists an obligation on the BCCI to terminate Media Rights License Agreement (MRLA) with MSM (Singapore) Pte. Limited if WSG (Mauritius) was not paid the facilitation fee by MSM.
‘To defraud the BCCI'
Further the BCCI says in the letter that it has been obliged, under the highly objectionable fraudulent agreement (dated 25 March 2009), in the alternative to pay the facilitation fee to the parties involved.
The BCCI has said: “There was no bargain/understanding between the BCCI and you (WSG, India) for these terms. We strongly believe that the agreement was signed by you (WSG, India) and Mr. Lalit Modi to defraud the BCCI of the amount of at least $ 80 million.''
Finally, BCCI has also indicated that MSM has filed a suit in the Bombay High Court against WSG, Mauritius and WSG, India (wherein BCCI is also a party), seeking a refund of the amount of Rs. 125 crore paid to WSG, Mauritius.
January 21, 2008: BCCI signs IPL Media Rights contract for $1.026 billion for ten years. This included $108 million commitment on promotional.
Media rights comprised of: SONY (now Multi Screen Media, Singapore): years 1-5 for TV rights for the Indian sub-continent. MSM had an option to secure the Indian sub-continent rights for years 6 through 10 from WSG India on payment of an option fee of $25 million with this fee being payable latest by year 3 of the contract or the option would lapse.
World Sport Group (India): years 1-5 for International TV, Global Radio, Mobile and Internet.
World Sports Group (India): years 6 to 10 for the Global Media Rights.
March 14, 2009: BCCI terminates agreement with MSM.
March 15, 2009: BCCI awards Indian sub-continent rights to WSG, Mauritius from 2009 to 2017.
March 25, 2009: MSM secures the India sub-continent rights for 2009-17 for Rs. 8,200 crore and also agrees to pay the facilitation fee of $80 million to WSG, Mauritius.
June 25, 2010: BCCI says facilitation fee of $80 million is improper and sorts out matter with MSM which agrees to pay the BCCI Rs. 300 crore over a period of seven years and in eight instalments. MSM also assures it will pay the BCCI Rs. 125 crore once it recovers the money from WSG.
June 25: MSM files a case against WSG at the Bombay High Court to recover Rs. 125 crore.
June 28: BCCI cancels all agreements with WSG, India.