Banks propose SPV for Deccan Chargers

Bombay High Court to hear Deccan Chargers' case today

A proposal by a group of banks to form a special purpose vehicle (SPV) to run the Deccan Chargers cricket team has been submitted to the Board of Control For Cricket In India (BCCI) working committee, though no outcome has been announced so far.

N Srinivasan, president of BCCI, the national cricket governing body, said he would not comment on the issue as it was under the consideration of the Bombay High Court. He, however, said reports that BCCI’s decision to terminate Deccan Chargers contract was stayed by the Bombay High Court were incorrect. “As we said in a statement earlier, there is no stay issued by the High Court .”

BCCI, in an emergency meeting of the Indian Premier League (IPL) governing council held on Friday evening, decided to terminate the Deccan Chargers contract on the ground that the team owned by the debt-ridden Deccan Chronicle Holdings Ltd (DCHL) had breached contract.

BCCI received a legal notice from Deccan Chargers, which said the franchise had not committed any breaches and the BCCI should not act to terminate the franchise as YES Bank Ltd had came forward to finance to remedy the issues.

Sources close to the development said a group of 32 banks had proposed BCCI that they were ready to form an SPV to take charge of the team. However, a BCCI source said: “We have never seen such a thing and don’t know how it would work. What is the guarantee whether it will work?”

The board might float a fresh tender for a new team from of the waiting franchise cities, or it may go with the original eight team format. It may be noted that the IPL started with eight-teams model and added two more teams — Pune and Kochi — later. However, the Kochi team was terminated later.

Earlier, BCCI had come out with a statement, saying the Mumbai High Court had heard the counsels of both the board and DCHL on the termination issue. The matter has been placed for hearing on Monday, said the release, quoting Sanjay Jagdale, secretary of BCCI.

On September 13, BCCI conducted an auction in the presence of a supervisor from the high court in which PVP Ventures, a film producing and real estate firm, came up with a bid for Rs 900 crore.

The bid was reportedly rejected by Deccan Chargers, following which the board took the decision to terminate the team contract.

“The BCCI is completely justified in this action which was taken with careful deliberation and only due to the absolute inability of the franchise to effectively run the team,” the BCCI said in a statement.

It is to be noted that earlier a bank had came forward to pay the dues to the players.

“Despite the Bombay High Court appointing a court officer to act as Observer at the opening of the tender, which was conducted under the aegis of the BCCI to save the beleaguered franchise, Deccan Chronicle Holdings Ltd rejected the bid that was received in the amount of Rs 450 crore cash and an equal sum in convertible debentures. This was despite the bidder meeting the eligibility criteria of the BCCI,” he said.