The government?s crackdown on the Indian Premier League (IPL) teams has begun. The registrar of companies (RoC) under the ministry of corporate affairs has already sent notices to all the franchisees asking them to furnish balance sheets of stakeholders/companies, their profit & loss statements, equity and shareholding structures and the composition of the board of directors. The franchises have been asked to submit the documents to the RoC by Wednesday.
Meanwhile, sources told FE that the government may also ask the Serious Frauds Investigation Office (SFIO) to probe the allegations of fund siphoning by the IPL commissioner Lalit Modi.
Confirming the receipt of the RoC notice seeking shareholders details, a senior official of the Bangalore-based team, Royal Challengers, said, ?We have already responded to the query from RoC.?
An official from an IPL team in North India also confirmed the move adding that the team would fully cooperate with the authorities and help get rid of rogue companies allegedly involved in other teams.
“We are looking into the matter and if anything comes in our purview which suggests something then we will definitely take up the matter,” corporate affairs minister Salman Khurshid said.
The MCA?s role comes in because of allegations that company law norms were violated while granting sweat equity to former minister of state for external affairs Shashi Tharoor?s friend Sunanda Pushkar in Rendezvous Sports World.
The Companies Act allows an unlisted company to issue sweat equity up to 15% of the total paid up capital in a year or shares of the value of Rs 5 crore, whichever is higher. However, if the sweat equity allotment is more than this in a year, then it will not be treated as sweat equity, unless the central government approval is taken.
According to the joint venture agreement between the Kochi team?s shareholders, the 25% sweat equity shared by Pushkar and others of Rendezvous Sports World was ?undilutable in perpetuity” and in return for management services rendered to the team. Though Pushkar has voluntarily given up her stake, experts said there?s no such provision and the entire thing needs to be examined.