The BCCI today sought to justifythe decision to terminate the IPL contract of debt-riddenDeccan Chargers, saying it was compelled to take action afterthe beleaguered franchise claimed that it had not committedany breaches and threatened to take legal recourse.
The BCCI said the decision to terminate the IPL contractof Deccan Chargers was taken after "careful deliberation" andonly due to the absolute inability of the franchise toeffectively run the team.
In a late night development yesterday, the BCCI crackedthe whip on the cash-strapped Deccan Chargers by terminatingthe contract, ending the suspense on the fate of thebeleaguered franchise. The decision was taken at an emergencyGoverning Council meeting of the IPL in Chennai.
"BCCI was compelled to hold an emergency meeting of theIPL Governing Council late Friday evening to discuss certaindevelopments due to the Deccan Chargers' defaults," Boardsecretary Sanjay Jagdale said in a press release.
"This evening (Friday), BCCI has received a lawyersnotice invoking arbitration from the franchise stating that ithad not committed any breaches and even if such breaches werecommitted, the BCCI should not act to terminate the franchisetill Yes Bank Ltd furnishes sufficient finance to cure thebreaches.
"By this, Deccan Chronicle Holdings Ltd has clearlyadmitted its inability to cure its breaches within the timestipulated in the BCCI notice despite every bit of assistancefrom the BCCI. Since the month of May, BCCI has receivedrepeated assurances that the overdue player fees would bepaid; all of these promises have been unfulfilled," Jagdalesaid.
Jagdale said the BCCI made every effort to save thebeleaguered franchise which also rejected the sole bid thatwas received at the auction.
"Despite the Bombay High Court appointing a court officer to act as Observer at the opening of the tender, which wasconducted under the aegis of the BCCI to save the beleagueredfranchise, Deccan Chronicle Holdings Ltd rejected the bid thatwas received in the amount of Rs 450 crores cash and an equalsum in convertible debentures. This was despite the biddermeeting the eligibility criteria of the BCCI," Jagdale said inthe release.
Jagdale said The Governing Council took note of thesudden change of stance by the franchise and also the factthat any further extension of time would seriously prejudicethe interests of the players.
"Considering the stated position of the Deccan franchiseto refuse to rectify the various defaults including paymentsto players, foreign Boards etc, as also the deleterious effectsuch conduct would have on the reputation of the IPL and thefranchise itself, a decision was taken to forthwith terminatethe Deccan Chargers franchise".
"The BCCI is completely justified in this action whichwas taken with careful deliberation and only due to theabsolute inability of the franchise to effectively run theteam," he said.
The termination of charges means that they will get nomoney and the BCCI will be entitled to encash the bankguarantee and make the necessary payment to the players andother stake holders. A similar thing has happened when thecontract of Kochi Tuskers Kerala was terminated.
According to a top BCCI official, the Board will nowexplore the option of floating a fresh tender for a new IPLteam for the sixth edition next year. The matter will bediscussed at the IPL Governing Council meeting and the WorkingCommittee meeting in Chennai.
"This option would be discussed when the governingcouncil meets as we want nine teams to take part in the nextedition of the IPL," the official said.
The BCCI, it is learnt, also took legal opinion beforedeciding to terminate the Deccan contract mainly on the groundthat it mortgaged the team to a consortium of banks which wasclearly a breach of contract.
The Deccan Chargers owned by Deccan Chronicle Holdings,was hoping to resolve its financial problems by selling theteam but it rejected the sole bid it received at the auctionin Chennai on Thursday.
PVP Ventures Limited, the Hyderabad-based urban infrastructure and film production company, had offered Rs 900crores but Deccan rejected it finding the terms of payment andthe amount unacceptable.
It is said that the banks were primarily unhappy with themode of payment which ultimately led to the deal fallingthrough.
Deccan Chronicle Holdings purchased the Hyderabadfranchise for Rs 428 crore in 2008. At the auction, the baseprice was said to be around Rs 750 crore.
The winning bidder had to meet BCCI's eligibilitycriteria and other requirements. This was the first time anentire IPL franchise has been put on the block by its owners,although Rajasthan Royals sold a small stake in 2009 to theactress Shilpa Shetty and her husband Raj Kundra.