For the first time in the history of the Indian Premier League (IPL), a cricket franchise will be owned by the shareholders of a company.
The Board of India Cements Ltd. (ICL) has cleared the decks for transfer of IPL franchise rights of Chennai Super Kings to its wholly owned subsidiary, Chennai Super Kings Cricket Ltd. While doing so, the Board approved a reorganisation plan for the newly formed subsidiary.
This is seen as a deft move ahead of the crucial March 2 annual general meeting of the Board of Control for Cricket in India. Under the revamp plan, the 97,054 shareholders of India Cements will be given shares of Chennai Super Kings Cricket Ltd. free in proportion to the shares they currently hold in the company. The promoters together hold a 28.23 per cent stake in the company.
“This is the first step to slowly getting India Cements into a pure-play cement company,” N. Srinivasan, vice-chairman and managing director of the company, said at a select press meeting immediately after the Board meeting here on Wednesday. “The ownership of Chennai Super Kings Cricket Ltd. will go to shareholders.”
The move will help shareholders of India Cements exercise their choice — to own only the cement business or the cricket franchise or both. “This will also be first instance of a sporting franchise in India held by public shareholders,” Mr. Srinivasan said.
To persistent queries, Mr. Srinivasan insisted that the modalities of share allotment were now being worked out.
The proposal for turning the IPL franchise into a separate wholly owned company was mooted last September. However, it acquired considerable significance in the light of a Supreme Court judgment of January 22 which directed the BCCI to hold its AGM within six weeks. The court further said that BCCI officials could not have commercial interests in the IPL. This meant that India Cements, controlled by Mr. Srinivasan, had to shed ownership of the CSK to enable him to contest the BCCI elections.
Will this latest move help Mr. Srinivasan in his quest for the BCCI top slot? To pointed questions, he refused to discuss the BCCI elections and the court judgment. The decision, he insisted, was only meant to make the ICL a pure-play cement company and give its shareholders options.
The Board decision is subject to required approvals.
Read: >SC's full judgment on the IPL scam
>Timeline
- › May 16, 2013: Rajasthan Royals players S. Sreesanth, Ankeet Chavan, Ajit Chandila held on spot-fixing charges
- › May 34: Gurunath Meiyappan of Chennai Super Kings arrested on betting charges
- › June 2: N. Srinivasan steps aside as BCCI president
- › Oct 8: Supreme Court appoints panel headed by Justice Mudgal
- › Feb 10, 2014: Panel indicts Meiyappan for betting
- › April 22: Supreme Court asks panel to continue with probe
- › November 17: Panel says Srinivasan ignored violation of player's code of conduct
- › Jan 22, 2015: Supreme Court absolves Srinivasan of charge of cover-up and misleading the probe committee
