BCCI violated RBI's foreign investment guidelines

The Reserve Bank has found violation of foreign investment guidelines by the The Board Of Control For Cricket In India (BCCI), the parent body of the Indian Premier League (IPL), which organises Twenty20 cricket tournament.

RBI, according to sources, has discovered violation of norms by the BCCI with regard to foreign direct investment (FDI), transfer of money and opening of some accounts.

The BCCI top bosses were grilled yesterday by the parliamentary standing committee on finance, on the basis of the central bank report, sources said.

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

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

These issues came to light during an investigation by the Enforcement Directorate (ED) into the IPL affairs.

The cricketing body extended 72 guarantees aggregating over US$13 million to pay base fee to foreign players.

The parliamentary committee, sources said, sought an explanation from the BCCI top brass, which includes president Shashank Manohar, secretary N Srinivasan and IPL commissioner Chirayu Amin.

The committee also asked the BCCI officials if they were aware of a government report that investments made by IPL franchisees such as Rajasthan Royals, Kolkata Knight Riders, Kings XI Punjab and Mumbai Indians were routed from outside India, through entities located in countries such as Mauritius, Bahamas, British Virgin Island.

BCCI was also asked about the funding pattern of the highly popular IPL and the methods adopted for payment to foreign and Indian players.

The committee sought details of the expenses incurred on the conduct of the second edition of the Twenty20 tournament in South Africa in 2009.

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

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

fterwards, its founder commissioner Lalit Modi fell out with his cricketing and political bosses and was forced to quit the BCCI.

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