BCCI justifies decision to terminate Deccan contract
The BCCI said the decision to terminate the IPL contract of Deccan Chargers was taken after “careful deliberation” and only due to the absolute inability of the franchise to effectively run the team.
In a development on Friday, the BCCI cracked the whip on the cash-strapped Deccan Chargers by terminating the contract, ending the suspense on the fate of the beleaguered franchise. The decision was taken at an emergency Governing Council meeting of the IPL in Chennai.
“BCCI was compelled to hold an emergency meeting of the IPL Governing Council late Friday evening to discuss certain developments due to the Deccan Chargers’ defaults,” Board secretary Sanjay Jagdale said in a press release.
“This evening (Friday), BCCI has received a lawyers notice invoking arbitration from the franchise stating that it had not committed any breaches and even if such breaches were committed, the BCCI should not act to terminate the franchise till Yes Bank Ltd furnishes sufficient finance to cure the breaches.”
“By this, Deccan Chronicle Holdings Ltd has clearly admitted its inability to cure its breaches within the time stipulated in the BCCI notice despite every bit of assistance from the BCCI. Since the month of May, BCCI has received repeated assurances that the overdue player fees would be paid; all of these promises have been unfulfilled,” Jagdale said.
Jagdale said the BCCI made every effort to save the beleaguered franchise which also rejected the sole bid that was received at the auction.
“Despite the Bombay High Court appointing a court officer to act as Observer at the opening of the tender, which was conducted under the aegis of the BCCI to save the beleaguered franchise, Deccan Chronicle Holdings Ltd rejected the bid that was received in the amount of Rs 450 crores cash and an equal sum in convertible debentures. This was despite the bidder meeting the eligibility criteria of the BCCI,” Jagdale said in the release.
Jagdale said The Governing Council took note of the sudden change of stance by the franchise and also the fact that any further extension of time would seriously prejudice the interests of the players.
“Considering the stated position of the Deccan franchise to refuse to rectify the various defaults including payments to players, foreign Boards etc, as also the deleterious effect such conduct would have on the reputation of the IPL and the franchise itself, a decision was taken to forthwith terminate the Deccan Chargers franchise”.
“The BCCI is completely justified in this action which was taken with careful deliberation and only due to the absolute inability of the franchise to effectively run the team,” he said.
The termination of charges means that they will get no money and the BCCI will be entitled to encash the bank guarantee and make the necessary payment to the players and other stake holders. A similar thing has happened when the contract of Kochi Tuskers Kerala was terminated.
According to a top BCCI official, the Board will now explore the option of floating a fresh tender for a new IPL team for the sixth edition next year. The matter will be discussed at the IPL Governing Council meeting and the Working Committee meeting in Chennai.
“This option would be discussed when the governing council meets as we want nine teams to take part in the next edition of the IPL,” the official said.
The BCCI, it is learnt, also took legal opinion before deciding to terminate the Deccan contract mainly on the ground that it mortgaged the team to a consortium of banks which was clearly a breach of contract. The Deccan Chargers owned by Deccan Chronicle Holdings, was hoping to resolve its financial problems by selling the team but it rejected the sole bid it received at the auction in Chennai on Thursday.
PVP Ventures Limited, the Hyderabad-based urban infrastructure and film production company, had offered Rs 900 crores but Deccan rejected it finding the terms of payment and the amount unacceptable.
It is said that the banks were primarily unhappy with the mode of payment which ultimately led to the deal falling through.Deccan Chronicle Holdings purchased the Hyderabad franchise for Rs 428 crore in 2008. At the auction, the base price was said to be around Rs 750 crore.
The winning bidder had to meet BCCI’s eligibility criteria and other requirements. This was the first time an entire IPL franchise has been put on the block by its owners, although Rajasthan Royals sold a small stake in 2009 to the actress Shilpa Shetty and her husband Raj Kundra.