I-T probe to find if Lalit Modi holds 'benaami' stake in Rajasthan Royals

The income tax (I-T) department has launched a probe to find out if IPL chairman Lalit Modi holds a benaami stake in Rajasthan Royals (RR).

Amidst allegations that RR is owned by Modi and his kin through a complex network of firms, the department has sent a detailed questionnaire to the BCCI. I-T department got suspicious after it emerged that RR was awarded to a company that had not originally bid for it.

According to the sequence of events pieced together by DNA, in January 2008, Emerging Media (EM) — a subsidiary of UK-based Blenheim Chalcot — won RR franchise for $67 million.

The face of the company was its chairman Manoj Badale, who was running a cricket talent hunt with the Rajasthan Cricket Academy when Modi was its chief.

Badale was accused of taking care of Modi’s interests.  Soon, EM became part of another company registered in Mauritius. The new company was called Emerging Media Sporting Holdings Ltd, Mauritius.

However, in this company, Modi’s brother-in-law Suresh Chellaram and his brother had majority stake.

Chellarams investments were routed through Tresco International, whose origins are ambiguous. On March 3, 2008, this Mauritius-based company formed another subsidiary called Jaipur IPL Cricket Pvt Ltd (JICPL), based in India, and signed the franchise for the IPL team.

I-T wants to find out why the investments took this meandering route and why the deal was signed with a company that was not even existent when the bid was won.

In August 2009, attempts were made to pass on majority stake to Badale. JICPL had approached the Foreign Exchange Promotion Board for issuing 50% shares to EM in lieu of the $5million he had paid as earnest money.

The company had offered Badale a heavy discount. While offering equity to Badale, JICPL valued the franchise at nearly $67million. A few months earlier, when actor Shilpa Shetty and husband Raj Kundra had bought shares in the firm, it was valued at nearly $140million.

The proposal to issue shares to Badale’s company was, however, struck down by the FIPB. The government wanted to know how Badale paid $5million even before JICPL was formed.