Parliament panel to summon RBI, FIPB brass on IPL row

Rapping government agencies for “tardy” investigation in the Indian Premier League (IPL) controversies, the Parliamentary Standing Committee on Finance has decided to summon top officials of the Reserve Bank of India (RBI) and Foreign Investment Promotion Board (FIPB) to answer questions on the alleged money laundering through the popular T20 cricket event.

According to a source in Parliament, the panel felt RBI and FIPB played major roles in allowing foreign investments in the country and, therefore, the two bodies must clarify their roles in IPL.

Revenue Secretary Sunil Mitra, Central Board of Direct Taxes (CBDT) chairman S S N Moorthy, Central Board of Excise and Customs chairman V Sridhar and Enforcement Directorate Arun Mathur had to face a volley of questions today from irked members of the parliamentary panel over a host of issues related to IPL and the Board of Control for Cricket in India (BCCI).

The questions ranged from the progress in investigation to why the government agencies failed in checking the antecedents and ownerships of the foreign-based companies that invested in the 2008 edition of IPL.

The committee, under the leadership of former finance minister Yashwant Sinha, also reminded the top finance ministry officials that the government agencies were not merely there to probe into irregularities but they also had a duty to check and stop frauds. They were asked if the government knew where all these foreign-based companies are located.

The officers couldn’t give detailed replies and repeatedly submitted that investigations were going on, the source said.

BCCI had ceased to be a charitable organisation in 2007 and thereby it has to pay income-tax. It was revealed that while its tax dues in the assessment year 2007-08 were Rs 118 crore, the board has so far paid just Rs 92 crore.

Members of the panel also asked the CBDT chairman why BCCI was given an income-tax exemption of Rs 125 crore in 2006-07.

They also wanted to know if the revenue earned by BCCI from the telecast and media rights of IPL were also taken into account while calculating their income-tax liabilities. Arun Mathur said the investigations into the actual size of the contracts of the television and media rights were still on.

The top officials also admitted that there were violations in the Foreign Exchange Management Act in the IPL contracts.

The panel also raised questions about two IPL teams — Rajasthan Royals and the Kings XI Punjab — over its murky ownership patterns.

“It was observed that while one company owns 99.9 per cent rights of the Jaipur team, three other companies, based in the UK, Nigeria and Australia, collectively own the rest 0.1 per cent. This looked very surprising and we sought details of the ownership,” said a member of the panel.