The BCCI on Saturday sought to justify the decision toterminate the IPL contract of debt-ridden Deccan Chargers, saying it wascompelled to take action after the beleaguered franchise claimed that it hadnot committed any breaches and threatened to take legal recourse.
The BCCI said the decision to terminate the IPL contract ofDeccan Chargers was taken after "careful deliberation" and only dueto the absolute inability of the franchise to effectively run the team.
In a late night development yesterday, the BCCI cracked thewhip on the cash-strapped Deccan Chargers by terminating the contract, endingthe suspense on the fate of the beleaguered franchise. The decision was takenat an emergency Governing Council meeting of the IPL in Chennai.
"BCCI was compelled to hold an emergency meeting of theIPL Governing Council late Friday evening to discuss certain developments dueto the Deccan Chargers' defaults," Board secretary Sanjay Jagdale said ina press release.
"This evening (Friday), BCCI has received a lawyersnotice invoking arbitration from the franchise stating that it had notcommitted any breaches and even if such breaches were committed, the BCCIshould not act to terminate the franchise till Yes Bank Ltd furnishessufficient finance to cure the breaches.
"By this, Deccan Chronicle Holdings Ltd has clearlyadmitted its inability to cure its breaches within the time stipulated in theBCCI notice despite every bit of assistance from the BCCI. Since the month ofMay, BCCI has received repeated assurances that the overdue player fees wouldbe paid; all of these promises have been unfulfilled," Jagdale said.
Jagdale said the BCCI made every effort to save thebeleaguered franchise which also rejected the sole bid that was received at theauction.
"Despite the Bombay High Court appointing a courtofficer to act as Observer at the opening of the tender, which was conductedunder the aegis of the BCCI to save the beleaguered franchise, Deccan ChronicleHoldings Ltd rejected the bid that was received in the amount of Rs 450 crorescash and an equal sum in convertible debentures. This was despite the biddermeeting the eligibility criteria of the BCCI," Jagdale said in therelease.
Jagdale said The Governing Council took note of the suddenchange of stance by the franchise and also the fact that any further extensionof time would seriously prejudice the interests of the players.
"Considering the stated position of the Deccanfranchise to refuse to rectify the various defaults including payments toplayers, foreign Boards etc, as also the deleterious effect such conduct wouldhave on the reputation of the IPL and the franchise itself, a decision wastaken to forthwith terminate the Deccan Chargers franchise".
"The BCCI is completely justified in this action whichwas taken with careful deliberation and only due to the absolute inability ofthe franchise to effectively run the team," he said.
The termination of charges means that they will get no moneyand the BCCI will be entitled to encash the bank guarantee and make thenecessary payment to the players and other stake holders. A similar thing hashappened when the contract of Kochi Tuskers Kerala was terminated.
According to a top BCCI official, the Board will now explorethe option of floating a fresh tender for a new IPL team for the sixth editionnext year. The matter will be discussed at the IPL Governing Council meetingand the Working Committee meeting in Chennai.
"This option would be discussed when the governingcouncil meets as we want nine teams to take part in the next edition of theIPL," the official said.
The BCCI, it is learnt, also took legal opinion beforedeciding to terminate the Deccan contract mainly on the ground that itmortgaged the team to a consortium of banks which was clearly a breach ofcontract.
The Deccan Chargers owned by Deccan Chronicle Holdings, washoping to resolve its financial problems by selling the team but it rejectedthe sole bid it received at the auction in Chennai on Thursday.
PVP Ventures Limited, the Hyderabad-based urbaninfrastructure and film production company, had offered Rs 900 crores butDeccan rejected it finding the terms of payment and the amount unacceptable.
It is said that the banks were primarily unhappy with themode of payment which ultimately led to the deal falling through.
Deccan Chronicle Holdings purchased the Hyderabad franchisefor Rs 428 crore in 2008. At the auction, the base price was said to be aroundRs 750 crore.
The winning bidder had to meet BCCI's eligibility criteriaand other requirements. This was the first time an entire IPL franchise hasbeen put on the block by its owners, although Rajasthan Royals sold a smallstake in 2009 to the actress Shilpa Shetty and her husband Raj Kundra.
