IPL – Diamond Mafia’s own private Zoo

IPL is more of a money game than of Cricket where Management Accountants could play the role of first, second and third umpire all put together.

IPL, the mega cricket event in India leads to a more difficult financial fiasco and crisis in the Indian Economy and Financial Sector. But this is just half the story what is not much talked about is how IPL could directly be facilitating the mobilization of international mafia funds with high profile celebrities and actresses used as honeytraps to lure the cricketers into match-fixing and thereby money laundering through tax-havens for the diamond mafia…

 

 

It is interesting to note that all the IPL team are predominantly owned by different companies, like Kolkata Knight Riders (KKR) is owned ny “Red Chilli Entertainment Pvt Ltd”. A company is formed to mobilize greater amount of fund from different sources both domestically as well as internationally and at the same time to get the shelter of corporate veil. It is interesting to note that Register of Companies (ROC) has also initiated measures to lift the corporate veil and investigate into the issue in depth. However, in such cases, disciplinary actions have since been initiated against any of the auditors or the learned members of the Institute of Chartered Accountants of India. “The kind of financial irregularities we are talking about could not have been possible without the knowledge of the auditors,” said the financial experts of the profession.

Violation of FEMA provision / Benami holding of shares & Taxability

There have been reports that funds from tax havens like Mauritius have been pumped into the league by various franchises in violation of FEMA provision.  The Enforcement Directorate (ED) has already  registered a case against the Indian Premier League (IPL) under Foreign Exchange Management Act (FEMA) to inquire into unauthorised transfer of foreign funds.  The case, registered, is the first by ED against IPL after it received preliminary information that funds from abroad, without the permission of RBI, might have trickled in, they said. It is reported that that funds from tax havens like Mauritius have been pumped into the league by various franchises in violation of FEMA provisions.

As of now, the ED has registered a case against unknown persons and would make an inquiry into the aspect of transfer of foreign funds. ICWAI’s research team would like to intervene into the issue and go for a detailed scrutiny into the scam and trace out the source of the fund and channalisation thereof from different countries including Mauritius.

With the battle to oust Indian Premier League commissioner Lalit Modi shifting to the Board of Control for Cricket in India, the Centre on Wednesday turned its full attention to allegations that the wheels of the T20 juggernaut were being lubricated by political influence peddling and illegal infusion of funds. In a coordinated move, Income Tax officials in Mumbai swooped down on three event management and broadcast firms connected to the IPL, while IT investigators sought financial and shareholding details from the 10 team-owning franchisees across India.

Amid swirling allegations of benami shares involving politicians and their relatives in the IPL, the Finance Ministry has constituted eight enforcement teams. Their investigations will be spread out across the country with I-T offices in Mumbai, Kolkata, Chandigarh, Delhi, Kochi, Hyderabad, Bangalore and Pune asked to source out information about financial transactions, money flows and team ownership across all franchises.  The Research team of ICWAI may in all the way help the  Enforcement Wing of the Finance Ministry to unearth  background towards formation of certain “shell companies” at mauritius  suspected of routing unaccounted money into IPL franchises.

Income Tax Default

In Kolkata and Chennai, taxmen visited the offices of the Kolkata Night Riders (KKR), owned by Bollywood superstar Shah Rukh Khan, and India Cements, which owns the Chennai Super Kings team, “seeking information” on the investments made by their managements in the IPL. I-T officials are slated to visit the premises of the other six IPL teams in their quest for information.

In Mumbai, a team of over 50 I-T officials started “search” operations on the premises of Multi Screen Media, World Sports Group and Pat Magnarella Management. Since it is alleged that MSM paid WSG a facilitation fee of $80 million for the IPL telecast rights, a deal in which the IPL management is said to be involved. There have been reports that funds from tax havens like Mauritius and the Cayman Islands have been pumped into the league by various franchisees in violation of FEMA provisions. An investigation by a Joint Parliamentary Committee would immediately be initiated. This is not the first time that IPL has run into a controversy with the income-tax department. “During IPL-1, the tax department had collected more than Rs 90 crore as TDS (tax deducted at source) after investigations while this year also after the returns for IPL-1 have been filed, some cases have already been selected for scrutiny, Although IPL-2 was not held in India, the taxmen are keeping a close watch on the returns being filed by the parties. “As for IPL-3, Rs 110 crore has been collected as advance tax, and Rs 40 crore more is expected.

CORPORATE GOVERNANCE & TRANSPARENCY

 

The Corporate Affairs Ministry has promised to step in if the shareholding and equity structures behind the franchises are found to be “hazy” and there are company law compliance issues. It is, however, not yet ready to give a clean chit to all the IPL franchises on the corporate governance front.   “If shareholding pattern of any of the franchises is found to be hazy, there will be a company law issue and we will then get involved. On our part, we are already doing the due diligence,” Mr Salman Khurshid, Corporate Affairs Minister, told  when he was  asked if the IPL and its business model were throwing up corporate governance issues.

“They are looking hazy because nobody has asked anyone to disclose yet. We have the filings. They are available to the public also on MCA-21. There is a general feeling that it is hazy, but they may or may not be hazy.”

Mr Khurshid also felt that it would be appropriate to wait for the agencies under the Finance Ministry, which are looking into IPL and its franchises’ funding, to come to some prima-facie conclusion and further told that  let the Finance Ministry arrive at some prima-facie conclusions. If they feel there is a corporate law aspect involved, then we will come into the picture. We are also doing our own due diligence. You can’t just shut your eyes to what is happening,”

The ICWAI under the aegis of the Ministry of corporate Affairs, Government of India would like to investigate into the fiasco of  breaching the Corporate Governance by  all the IPL franchises and companies and would like to bring in transparency and financial discipline.

Regulatory oversight

 

The Corporate Affairs Ministry also made it clear that its regulatory oversight would not extend to either IPL or BCCI as both of them are not corporate entities. “We will come into the picture only when there is a company law matter. The research team is in the process of investigating in detail the oppression of the regulatory framework and would come out suggestion towards bringing in good governance and transparency.

IPL and Diamond Mafia Nexus

On the first day of his libel case against former IPL commissioner Lalit Modi in London’s High Court, former New Zealand all-rounder Chris Cairns was questioned over large sums of money he received from a diamond trading company. Modi’s counsel Roger Thwaites queried Cairns as to his financial situation in 2008 and in particular his work for Vijay Dimon.

Cairns confirmed he received around 900,000 Emirati Dirham ($245,000) in three separate payments over the course of 2008 and 2009. However, while claiming he had not signed any contract and it was only a verbal agreement to do promotional and sales work, Cairns accepted he had no previous experience in the diamond industry. The initial payment, of more than 350,000 Emirati Dirham was for relocation costs, Cairns said, the rest being for appearances at dinners and events.

Chris Cairns was questioned on his illegal diamond trading links with Vijay Dimon, a firm owned by film financier, diamond merchant and underworld figure Bharat Shah. This guy is linked to Dawood Ibrahim in Dubai and Chotta Rajan based in Thailand. Both Thailand and Dubai are illegal diamond laundering centres. Was Chris Cairns fixing matches on behalf of diamond lobby and mafia ?

Cairns operates from Dubai . He was banned from playing in IPL by Lalit Modi for being a diamond merchant. Lalit Modi was pissed after Johri Bazar blats in Jaipur during IPL season. Modi was against diamond merchants investing money in Ahmedabad, Kochi and other franchisees…

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