Lalit Modi case: What exactly are the Enforcement Directorate and Income-Tax Department probing?

1. The two departments are probing if Lalit Modi had told selective bidders how much to bid and win during the first IPL team auction in 2008. The difference in bid amounts of the winner Rajasthan Royals and loser was $300,000 (a mere 0.45 per cent of the winning bid of $67 million). The ED is  probing if the winning consortium — Chellaram its major promoter — knew the amount its competitor had bid.

2. The ED is also probing the $80 million amount paid by Multi Screen Media (MSM), formerly Sony Entertainment, to World Sports Group (WSG) as 'facilitation' fees to withdraw from the telecast rights contract. WSG had bagged the rights for $918 million for a decade, but the contract was cancelled and a new one signed between IPL and MSM for $1.69 billion for a nine-year period. And MSM paid $80 million to WSG.

3. ED officials are probing whether $25 million of the $80 million paid by MSM to WSG was routed into the illegal accounts of Lalit Modi, his associates and political beneficiaries and if the former IPL commissioner used this money to buy his corporate jet through a Cayman Islands company. Interestingly, many of Lalit Modi’s private assets are owned through overseas entities incorporated in the British Virgin Islands and Cayman Islands.

4. Rajasthan Royals was fully owned by Jaipur IPL Cricket Private Limited, which in turn was wholly owned by the Mauritius-based EM Sports Holdings Ltd. EM Sports is 44.15% held by Tresco International Ltd of the British Virgin Islands, which is finally held by the Chellarams through two British Virgin Islands’ entities: Kabu Holdings and Westfield Consultants.11.74 per cent stake in EM Sports is held by the Hong Kong-based Blue Water Estate Ltd, controlled by Lachlan Murdoch, son of media baron Rupert Murdoch. The family of Raj Kundra owns 11.70% through Kuki Investments, headquartered in the Bahamas. The remaining stake in EM Sports is held by Manoj Badale’s Emerging Media, based in the UK.

5. The ED is also probing Ramesh Govani who owns the Four Seasons Hotel in Mumbai where Lalit Modi routinely stayed.

6. ED has also issued show cause notices involving an amount of Rs 2,148.3 crore of contravention of provisions of Foreign Exchange Management Act, 1999 (FEMA) against the BCCI, Lalit Modi and others.

7. In an Action Taken Report before the Parliamentary Standing Committee on Finance, the government said last December that the investigation has revealed the cricketing body having extended guarantees to the tune of $18.6 million in violation of FEMA rules.

8. Also, during the IPL II held in South Africa in April-May 2009, BCCI remitted an amount of $49.86 million without permission of the RBI for opening and/or operating foreign currency account in the African nation.

9. Besides, 19 show-cause notices involving a total amount of Rs 2,042.45 crore have been issued for contravention of FEMA provisions, the report said.

10. The FEMA violations relates to ownership of IPL franchises, nature of foreign investments and valuation of shares and transfer thereof in respect of some franchises.