IPL franchises violated Companies Act: Khurshid -Governance Now

IPL franchises violated Companies Act: Khurshid

Has asked registrar of companies to take appropriate action against errant teams

PTI | August 2, 2010

The government today said it has found company law violations in the ownership pattern in the several Indian Premier League (IPL) cricket teams and Registrar of Companies has been asked to take penal action.

"The preliminary information/reports have indicated non-compliance of certain provisions of the Companies Act, 1956," Minister of State for Corporate Affairs Salman Khurshid said in a written reply to the Rajya Sabha.

Following the auction of Kochi and Pune IPL teams for a staggering Rs 3,235 crore, and the controversy relating to sweat equity in Kochi team to a friend of then Union Minister Shashi Tharoor, the Corporate Affairs Ministry had asked for a thorough probe into accounts of all the teams.

Khurshid was replying to a query on whether preliminary investigation by the Ministry has uncovered irregularities and non-compliance with the Companies Act by owners of several IPL teams.

In April, the Registrar of Companies (RoC) had written to all IPL teams seeking complete information, including ownership details and proof of filing tax returns.

"...ROCs have been instructed to scrutinise the documents of the companies under section 234 of the Companies Act and take penal action, wherever warranted," Khurshid said.

The third edition of IPL was embroiled in controversies, including allegations about the union ministers influencing the auction of IPL franchisees.

Shashi Tharoor resigned as Union Minister of State for External Affairs over allegations that he influenced award of sweat equity to his friend Sunanda Pushkar in the Kochi team.

The authorities have since launched probe to trace the finances of the cricket body and its franchisees.

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