BCCI violated RBI''s foreign investment guidelines

Written by: Pti
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New Delhi, Jan 13 (PTI) The Reserve Bank has foundviolation of foreign investment guidelines by the BCCI, theparent body of the Indian Premier League (IPL), whichorganises Twenty20 cricket tournament.

RBI, according to sources, has discovered violation ofnorms by the Board of Control for Cricket in India (BCCI) withregard to foreign direct investment (FDI), transfer of moneyand opening of some accounts.

The BCCI top bosses were grilled yesterday by theParliamentary Standing Committee on Finance, on the basis ofthe central bank report, sources said.

It was pointed out that BCCI did not obtain permission ofthe Reserve Bank to extend bank guarantee to players asrequired under the Foreign Exchange Management Act (FEMA).

Sources said BCCI was required to take prior approval ofRBI for accepting deposits from overseas residents.

These issues came to light during an investigation bythe Enforcement Directorate into the IPL affairs.

The cricketing body extended 72 guarantees aggregatingover USD 13 million to pay base fee to foreign players.

The Parliamentary Committee, sources said, sought anexplanation from the BCCI top brass, which includes PresidentShashank Manohar, Secretary N Srinivasan and IPL CommissionerChirayu Amin.

The Committee also asked the BCCI officials if theywere aware of a government report that investments made byIPL franchisees such as Rajasthan Royals, Kolkata KnightRiders, Kings XI Punjab and Mumbai Indians were routed fromoutside India, through entities located in countries such asMauritius, Bahamas, British Virgin Island.

BCCI was also asked about the funding pattern of thehighly popular IPL and the methods adopted for payment toforeign and Indian players.

The Committee sought details of the expenses incurred onthe conduct of the second edition of the Twenty20 tournamentin South Africa in 2009.

IPL was held in South Africa following a clash of dateswith the general elections in India.

Based on the lines of the English Premier League (EPL)and the National Basketball League (NBA), the IPL wasintroduced in India in 2007.

Afterwards, its founder Commissioner Lalit Modi fellout with his cricketing and political bosses and was forced toquit the BCCI.

Sans Modi, BCCI is trying to host the fourth edition ofthe IPL matches.

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