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Cricket, money and politics April 27, 2010

Posted by southasiamasala in : India, Stoddart, Brian , trackback

Brian Stoddard

Chennai Super Kings might have beaten the more fancied Mumbai Indians in the final of the Indian Premier League (IPL), but the match was a sideshow to the real battles now faced by cricket bosses, industrial barons, political leaders and even movie stars.

The problems began just a few short weeks ago with the auctioning of two new franchises in what had become the IPL money-mill.  A consortium bidding $333 million to have Kochi in Kerala host a team was successful. Shortly after Lalit Modi, the IPL Commissioner, posted a note on his Twitter site that the bid was flawed, and that the flaws were associated with junior External Affairs Minister Shashi Tharoor, the former UN diplomat and prominent writer who was already struggling in his post. Tharoor struck back with the suggestion Modi wanted the Kochi bid voided so that his more favoured Ahmedabad franchise might then slip in.

Things unravelled fast. It soon appeared that a lady friend of Tharoor’s had been given a 25% “silent stake” in the Kochi franchise, and it was naturally alleged that the share really went to Tharoor.  Tharoor denied that, but by now the Congress high command was alarmed, and a meeting involving Sonia Gandhi and Manmohan Singh determined that Tharoor must resign. That has now morphed into the major phone-tapping controversy, because it is now alleged that the subjects included Modi and political/cricket boss, Sharad Pawar.

At the same time, the Government sanctioned raids by the Income Tax Department on several IPL franchise offices as well as on media and sports management groups associated with the business. IT officials were soon suggesting that they had solid evidence concerning irregular practices.

Lalit Modi himself came under pressure and the Board of Control for Cricket in India (BCCI), as the upstream owner of the IPL, announced that he was dismissed. Modi claims he is simply suspended but the BCCI position clearly has him sacked.

It was widely reported that Congress leaders considered all this one of its biggest challenges to date so, naturally, the question is why?

Cricket in India in recent years has become an important political institution, so drew in politicians who may well have liked the game but also saw the benefits offered by its mass appeal. BJP boss Arun Jaitley is now President of the Delhi Cricket Association and Narendra Modi, his party colleague and embattled Chief Minister of Gujarat, took over as President of the Gujarat Cricket Association last year in what was widely reported as the BJP replacing Congress sway over cricket in the state. Several other prominent politicians hold similar posts, perhaps most notably Laloo Prasad Yadav in Bihar.

The most notable political figure in all this, though, is Sharad Pawar. The now Union Minister for Agriculture and former Chief Minister of Maharashtra, where he is still President of the state’s Cricket Association, is about to become the Chair of the International Cricket Association where his deputy will be former Australian Prime Minister John Howard who may well have only an inkling of what he is about to encounter. Pawar is also leader of the important Congress ally in government, the Nationalist Congress Party (NCP). Having to give up leadership of the BCCI in order to take the international post, Sharad Pawar was replaced by Shashank Manohar from Maharashtra whose father served as Advocate-General in Pawar’s state government.

The current IPL travails, then, have a strong political resonance, almost certainly why Pawar effectively abandoned Lalit Modi, long considered a close ally, when the allegations first surfaced. Some politicians are now trying to argue that because the cricket interests are cross-party the game’s affairs are not really a political issue.

That would be disingenuous enough, but the intermix of money makes it almost laughable. Lalit Modi was given carte blanche by the BCCI to make a success of the IPL, and was given a huge seed grant to achieve that. The early franchises sold for big money but have become worth more –  Lachlan Murdoch became a founding owner of the Rajasthan Royals that was purchased for about $130 million, and just before the latest scandal was valued at around $800 million. Modi was President of the Rajastahan Cricket Association as well as IPL boss at the time and there have been persistent rumours of him holding a “silent share”, known delightfully as “sweat equity”, in the team. In fact, that is now one of the charges laid against him by the BCCI.

This intermix of money and politics is potent. For example, one suggestion is that Modi “outed” Tharoor simply in order to gain the entry of the Gujarat franchise in return for a consideration. Pawar himself is implicated in this, too. Some emails surfaced suggesting that Pawar’s son-in-law and the Civil Aviation minister, Praful Patel may have been connected with some actions around the selling of broadcast rights to the IPL where inducements seem to have been paid.

Put simply, while there were always rumours of “bid rigging”, it is likely now that some evidence of that will emerge from the IT investigations. In turn, that has inevitably returned the focus to issues of betting and the possibility of rigged results, that is, “match fixing” which was such an embarrassment for Indian cricket and India itself several years ago. One extraordinary development in the whole saga is another story leaked by Shashi Tharoor that he received death threats from the underworld’s Dawood Ibrahim gang which is supporting Lalit Modi because, some allege, Don Dawood receives a massive income from illegal betting on the IPL.

At a time when India Inc is seen to be on the rise, this has all essentially become a matter of corporate governance and business confidence. That is one of the reasons why, for example, Kingfisher conglomerate boss and Royal Challengers Bangalore franchise holder Vijay Mallaya  has been vocal in support of Modi – protecting corporate image is important enough but demonstrating good corporate governance might be even more important, and possibly harder to maintain if investigations prove some of the current allegations. The same will be true for Nita Ambani, major franchisee in the Mumbai Indians, and movie stars like Shah Rukh Khan and Preity Zinta who have big stakes in the Kolkata Knight Riders.

This spreads to the BCCI itself, because all the IPL developments confirm suspicions of insider trading.  BCCI Secretary N.Srinivasan, for example, is said to hold a major stake in the Chennai Super Kings, and some observers suggest that surely has to be a conflict of interest when dealing with issues like the latest allegations or dealing with Modi. Srinivasan is Managing Director of India Cements, a company founded by his father; a prominent nationalist industrialist, and President of the Tamil Nadu Cricket Association, illustrating some of the ties that cricket has created in India.

This IPL episode has the capacity to produce even more startling revelations in the coming weeks, and they will all highlight the unique Indian interplay between cricket, money and politics that has the potential to derail India’s runaway development train.

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