BCCI under scanner for FERA violations
New Delhi : The Board of Control for Cricket in India (BCCI) is under the scanner of the Enforcement Directorate(ED), which is contemplating to charge India’s supreme cricket body with having violated foreign exchange regulations, a published report said on Tuesday.
The report said the BCCI kept the Reserve Bank of India (RBI) in the dark about financial guarantees of around $13.4 million (Rs 62 crore) it gave to international cricketers to ensure their participation in the Indian Premier League (IPL).
The ED, in a confidential report, has said the BCCI entered into agreements with as many as 72 foreign players to pay them a base fee in foreign exchange without seeking necessary approvals. This payment was entirely separate from whatever the IPL franchisees paid to buy players at the auctions and has never been disclosed publicly, daily ‘The Hindustan Times’ quoted the ED as saying.
“Investigations have revealed that in order to facilitate the franchisees to contract international players, the BCCI-IPL entered into a memorandum of understanding with 72 foreign players as per which the BCCI extended guarantee to pay the base fee to the foreign players irrespective of the outcome of the bid. These guarantees were given by the BCCI without the permission of the RBI,? the ED says in its report.
When contacted, BCCI officials claimed ignorance. “I am not aware of it (alleged violation),” said Ratnakar Shetty, the BCCI’s chief administrative officer.
Under the Foreign Exchange Management Act (FEMA), no resident Indian can offer financial guarantee in foreign exchange without RBI approval.
The ED?s findings are part of a multi-agency probe launched by the government in April, after allegations of financial irregularities relating to the tournament and its then chief organiser, Lalit Modi, surfaced.
The ED has also found that foreign exchange payments worth $2.5 million (Rs 11.5 crore) were made by BCCI to different entities in South Africa where the tournament was held in its second year in 2009, says the report.
“The expenses incurred by the BCCI for staging the tournament in South Africa are stated to have been ‘netted off’ with the money earned in South Africa through the tournament,” said a senior official, who did not wish to be identified, HT reported.
This means that the BCCI told finance authorities that whatever payments it made in advance to South African entities should not be considered as loss of foreign exchange. Instead, these should be deducted from the foreign exchange earnings during the tournament. “But remittances made as advances and netting off of accounts amounts to contravention of FEMA rules,? the official pointed out.
