ED puts BCCI in dock for Rs 1,650cr forex violations

MUMBAI: The Enforcement Directorate (ED) has issued show-cause notices to the Indian cricket board for foreign exchange contraventions amounting to Rs 1,650 crore. The violations under FEMA relate to the conduct of the second edition of the Indian Premier League (IPL) in South Africa in 2009.

BCCI conducted the tournament in South Africa purportedly because the government could not provide security cover owing to the general elections. The BCCI entered into an agreement with Cricket South Africa (CSA) and hosted the tournament there over a period of 37 days.

For that purpose, a foreign bank account was operated by the BCCI without disclosing or seeking approval of the Reserve Bank of India as required under the FEMA (1999) legislation. Other banks were also not informed.

The BCCI illegally transferred Rs 250 crore to this foreign bank account through the CSA and spent it on IPL 2, evading scrutiny by the RBI and other banks, the ED said.

It said the BCCI had failed to repatriate the revenues earned in South Africa. The ED also found that the State Bank of Travancore (SBT) had failed to discharge its responsibilities in regulating and monitoring these transactions.

Lalit Modi, former chairman of IPL, was mainly responsible for the conduct of IPL 2 and has been issued a show-cause notice by the directorate. Besides SBT and its officials, other officials of the BCCI, including former president Shashank Manohar and current president N Srinivasan, have also been issued a show-cause notices.

The BCCI officials - Manohar, Srinivasan and Modi (now suspended and facing an internal inquiry) - had worked together in taking IPL 2 to South Africa after they were convinced that hosting the tournament in India with adequate safety measures was not possible.

The tournament in South Africa was a huge success but not without its share of controversies. CSA also underwent an independent probe in 2010-11 after financial irregularities were reported in the South African media.

It was alleged by some members of CSA that approximately 68 million rand had gone missing from its coffers and that some officials had been paid close to 4.8 million rand in bonuses for the successful conduct of the IPL in South Africa in 2009.