da leao： The 30-day deadline given to the Kochi IPL consortium to settle its ownership dispute is a legal step taken by the board towards terminating the franchise
da heads bet： Nagraj Gollapudi27-Oct-2010The Kochi mess
April 11: Consortium winning the Kochi franchise gives the BCCI an agreement listing seven investors.
August 19: BCCI receives a letter from Rendezvous Sports World raising questions over the agreement vis-a-vis equity shares and seeking board’s approval to amend the share-holding structure.
September 9: Sunanda Pushkar informs the board that she has transferred 190 shares in Rendezvous Sports to Pushpa Gaikwad.
September 16: Rendezvous informs the board that Satyajit Gaekwad – appointed CEO – would be the sole point of contact for the company and, in a second letter, asks it to ignore any requests from “any of the other consortium members” to modify share-holding pattern.
September 23: Chintan Vora writes saying he, Vipul Shah and Saket Mehta are the only people authorised to represent the business.
September 25: Vora writes again saying that Kochi Cricket Pvt. Ltd. would be formed to take over the franchise from existing entity.
September 29: BCCI president Shashank Manohar sends show-cause notice to the franchise saying the board is concerned that the internal dispute will damage the IPL and asks for document saying dispute has been resolved and a company will be incorporated in a fixed timeframe.
October 27: The BCCI issues a termination notice to the Kochi franchise but gives it a 30-day deadline to reply, explaining why it shouldn’t be scrapped.
The 30-day deadline given to the Kochi IPL consortium to settle its ownership dispute is not a reprieve for the troubled team, but rather a legal step taken by the IPL governing council towards terminating the franchise.A BCCI insider privy to the meeting held in Nagpur on Wednesday told ESPNcricinfo that the Board is not confident the ownership issue will be resolved amicably between the two factions because of the two different replies sent by them to the board’s October 12 show-cause notice. The franchise was asked to form a registered company in order for the board to communicate with one entity, and not different groups in the five-partner consortium. The consortium has not, the Board believes, come close to arriving at a settlement, with the official calling it, “an irretrievable situation.” He said, “The dispute is not so easy to solve”.According to him, the BCCI were forced to issue a notice under the provisions of the original contract signed with the Kochi franchise when it was formed in March. “It is mandatory process where the board is required to give them the notice of 30 days because theirs is a breach that can be repaired, and it is not irrevocable. In case they are able to resolve their issue, they will have to show it to us and prove it is resolved. Otherwise at the end of the notice, it stands terminated,” he said.Shashank Manohar, the BCCI president, chaired the meeting today and informed the IPL panel about receiving more than one reply from the two groups in the Kochi franchise. One reply arrived from the lawyer of Rendezvous India Pvt. Ltd, led by the Gaikwad family, and the other from the group of investors led by Mehul Shah of the Anchor Group.”Both were asking different things: Rendezvous stated that the sweat equity (originally granted to them for promoting and investing in the company leading to the bid) is paid equity,” the official revealed. “The rival group was of the view that even it if it was paid equity, they did not want to accept the money.”Gaikwad’s lawyer had stated in the reply that his client was willing to buy out the sweat equity of 25% given for life in the original bid document and convert it into paid equity. The rival faction remained adamant, wanting Rendezvous to exit, with the situation leading to a deadlock. In that time both factions tried to find a way out. The Shah group told Gaikwad that they would pay 10% of the sweat equity in cash in exchange of their rivals quitting Kochi. Gaikwad’s original counter proposal stated that he was ready to buy out 15% of the sweat equity, but he subsequently raised the offer, saying he was ready to buy out the entire 25% free equity.After that offer was rejected, Rendezvous went back to the negotiation table with a reduced equity buyout offer from 25% to 20%. Shah and the other investors initially agreed to the 20% offer 24 hours before the BCCI deadline, but under terms and conditions unacceptable to Rendezvous. The next day both the groups submitted individual replies through their lawyers.According to the BCCI source, the conflict is serious. “There are four people [investors] who had been brought together by one person [Gaikwad]. When the investors signed the original document they did not know what they were signing into”. The main deal-breaker in the dispute is that Gaikwad wants to retain his control over the cricket which, the BCCI official said, “the investors are completely against. They want him to leave the consortium and hence the deadlock.”The official fears Kochi might eventually run out of steam. “This cannot be solved. While they are saying they are solving the controversy, they are actually doing the opposite.”Should the Kochi franchise be terminated, it will become the third of the ten teams which were expected to participate in IPL4 to be expelled from the league, following the scrapping of the Rajasthan Royals and Kings XI Punjab earlier this month.It is here, however that the BCCI are trying to cover their legal tracks by issuing them a 30 day termination notice. The case with the Royals and Kings XI was handled very differently with both teams being asked to explain their ownership patterns in May. Kings XI for example sent in their reply in May and received neither response or show cause from the BCCI until their franchise was terminated in October without any notice. Already the Royals have gone to court and King’s XI are expected to follow suit.Should Kochi meet with the same fate, the BCCI would have done so in strict adherence with the terms of their contract with the new franchise.
