Sahara Group: We withheld bank guarantee due to BCCI's betrayal of trust

Pune Warriors India’s contract was terminated by BCCI on Saturday © IANS

New Delhi: Oct 26, 2013

Sahara Group on Saturday sought to defend its decision to not furnish the bank guarantee to the Board of Control for Cricket in India (BCCI) which led to the termination of Pune Warriors from the Indian Premier League (IPL), saying that it was forced to do that as the board “has always acted in betrayal of trust and not fulfilled its part of obligations”.

Sahara Group said the “arbitrary” reduction in the number of IPL matches by the BCCI from the number stipulated in the franchise agreement was at the centre of the whole dispute.

“BCCI had made pre-bid representations that 94 matches will be held in every season and then arbitrarily reduced the number of matches from 94 to 74 & then 76. Sahara had placed its bid for IPL franchise based on the representations of BCCI which were false,” the Sahara group said in a release.

“The reduction in the number of matches has had a substantial financial impact due to the reduction in the central revenues under the Franchise Agreement. Sahara had raised the issue regarding significant reduction in the number of matches which was one of the most important basis and criteria for the bid, since 2011,” it said.

“BCCI did not want to honour their promises. Therefore due to non fulfilment of reciprocal obligations of BCCI and failure to keep its promises as given in February 2012, Sahara was left with no option but to hold back the bank guarantee till promises and obligations were fulfilled. But instead of fulfilling its promises and obligations, BCCI went ahead and terminated the contract, though itself is in breach.”

With a defiant Sahara group refusing to furnish the requisite bank guarantee, the BCCI on Saturday decided to terminate Pune Warriors from the IPL after a meeting of its all-powerful working committee in Chennai.

Sahara said the BCCI’s act of terminating Pune Warriors from the IPL for non submission of bank guarantee was a desperate measure to cover up its (board’s) non-compliance of promises and obligations.

“The issue raised by BCCI in creating grounds for termination as non submission of bank guarantee seems like a desperate measure to cover for their non-compliance of promises and obligations.”

“Sahara has paid over Rs 1000 crore as sponsorship fee for the Indian team to BCCI since 2001 without any default ever. This is apart from the franchise fee for Pune Warriors which Sahara kept on paying since year one despite being given false assurances of justice,” Sahara Group said.

Sahara also accused the BCCI of thwarting the arbitration process which was proposed to settle the issue amicably.

“Despite assurances given in a meeting between Mr. Subrata Roy and Mr N Srinivasan, president of BCCI in February 2012, subsequent to which a joint media statement was issued whereby both parties agreed to start the arbitration proceedings to address Sahara’s claim for a reduction in franchise fee for 74 matches,” the company said.

“However, in contravention of the understanding reached between the parties, no steps were taken by BCCI to address our long standing demand of the reduction of the franchise fee. In fact, far from starting the arbitration, BCCI has thwarted the process.”

Sahara said this was not the only time that BCCI has treated Pune Warriors in an unfair manner.

“Right from day one, when the rule of player retention was altered prior to IPL Season 4 (which was the first year of PWI in the league) all our requests for seeking a level playing field by having an open auction for the players were turned down. The original franchise document of 2008 had a provision of open auction every three years. Hence, when constituting a new team we were deprived of the opportunity to bid for players of the likes of Sachin [Tendulkar], [Mahendra Singh] Dhoni, [Virender] Sehwag, [Shane] Watson, [Lasith] Malinga etc.”

“As a promoter of sports, the insensitiveness towards our genuine concerns was very disheartening and this step though known, is unfortunate,” it said.

Sahara said invoking the bank guarantee was also an act of betrayal as the BCCI had assured that the issue will be resolved amicably.

“When Mr Subrata Roy Sahara himself wrote to BCCI president expressing his concerns before the start of the last Season, the BCCI president chose not to respond himself, instead deputing his agency to send a denial for consideration,” Sahara said.

“Mr Rajeev Shukla had met Mr Roy before Season 6 and assured him that all issues will be resolved and requested him to be patient. When the Season was on, the payment of the last installment for the Season was discussed and everytime Sahara was assured that the issue will be resolved and a mutually agreeable solution will be arrived at,” it said.

“However, again in stark contravention of the understanding and betrayal of trust, our bank guarantee was invoked. BCCI waited before conducting this act of betrayal because any such move midway through the tournament would have jeopardized their broadcaster commitments.”