Mumbai, April 20
A number of agencies have begun to probe the functioning of the Indian Premier League. Apart from bodies under the Finance Ministry like the Enforcement Directorate and the Income Tax department, the Ministry of Corporate Affairs has also joined the investigations.

The Registrar of Companies has, under the Ministry of Corporate Affairs, sent queries to all the franchise owners seeking among other things information on shareholders of the companies holding shares in the teams. According to sources in the Registrar of Companies, replies sent in by the franchise owners would be scrutinised and books of accounts and memoranda of association of these entities would also be examined in the coming days. Another agency that has been drawn into the probe is the Serious Frauds Investigations Office, which was set up shortly after the Satyam scandal two years ago. The SFIO is looking into the background of the investors and holding companies who have invested money into the IPL franchises.

Among the allegations against the IPL franchisees include benami share-holding by politicians and senior BCCI officials and routing of slush funds and unaccounted money. While the Rendezvous Sports World, which won the Kochi franchise is already under probe, the source of funds by other franchisees will also be looked into, according to sources.

Meanwhile, the Centre is poised to invoke the Indo-Mauritius treaty to obtain information on investors who routed funds via this tax haven, according to sources. The Income Tax department will seek information on the grounds that money laundering may have taken place with money taken out of the country via the hawala route being brought back via Mauritius. Shares in at least three of the franchisees are held by a complex web of entities spread over various countries like Mauritius, Bahamas, Macau, Cayman Islands and Nigeria, preliminary investigations indicate. In the scanner are the Kolkata Knight Riders team where shares are held by Jay Mehta, husband of actress Juhi Chawla and the Rajasthan Royals Team. Some of the investments in the teams come under the purview of Foreign Direct Investment.

The allegation: Benami share-holding by politicians and senior BCCI officials and routing of slush funds and unaccounted money

I-T probe base: Money laundering may have taken place, with money taken out of country via hawala being brought back via Mauritius

Mumbai, April 20
The Board of Control for Cricket in India has been making huge profits in Maharashtra, thanks to some arm-twisting of the government by Sharad Pawar’s Nationalist Congress Party, which is in alliance with Chief Minister Ashok Chavan’s Congress.

While Chavan has been advocating entertainment tax on IPL matches played in Maharashtra, his Finance Minister Sunil Tatkare (NCP) flatly said turned down the proposal. Chavan had to beat a hasty retreat in order to maintain ties with Pawar’s NCP. As expected, the move invited flak from the Congress camp and even the opposition. Forest Minister Patangrao Kadam hit out at Chavan for backing down. “It is difficult to understand…whose interests the government is serving,” Kadam told attendees at a party function.

Chavan, who was also present, immediately said there was no loss of revenue on account of no entertainment tax being levied on IPL matches in the first place. “Tatkare, who belongs to the NCP, is trying to appease his party boss Sharad Pawar,” BJP spokesman Madhav Bhandari said. He noted that tax waivers are given after an entity specifically asks for it. “Did IPL ask for a tax waiver,” Bhandari asked.

According to the BJP leader, state governments like Punjab were levying entertainment tax on IPL. Furthermore, the organisers were also asked to foot the security bill, Bhandari said. While the government insists that foregoing a 25 per cent entertainment tax on ticket sales would result in a revenue loss of Rs 20 crore, the BJP insists that the loss would be in the region of Rs 300 crore.

The BJP says turnover at IPL matches played in state would be in the region of Rs 1,600 crore, taking into account ticket sales, stadium and television advertising and telecast rights. The entertainment tax on all this would amount to Rs 300 crore, Bhandari said.