Mumbai: The Board of Control for Cricket in India (BCCI) and Deccan Chronicle Holdings Ltd (DCHL) agreed on Monday to the arbitration of their dispute over the Indian Premier League (IPL) Deccan Chargers franchise.
The Bombay high court said proceedings on the dispute will continue on Tuesday and the judge will suggest options on an arbitrator for further hearings into the matter.
Deccan Chronicle had approached the court on 15 September for a stay against the cricket board’s decision to terminate the franchise and invite bids for a new IPL team. On 17 September, the court had directed BCCI to stop the process until the final hearing of the case on 24 September.
Earlier on Monday, Deccan Chronicle denied, through a rejoinder filed in court, that it had told BCCI it wouldn’t be able to operate the franchise in a 29 August letter.
The company also denied any breach in the franchise agreement in its affidavit filed in the high court in response to the BCCI terminating its contract on 14 September. Deccan Chronicle, which has been trying to sell the team because of its financial woes, rejected a lone bid for Deccan Chargers at an auction on 13 September. Real estate company PVP Ventures Ltd had bid Rs.900 crore for the team.
The termination of the contract by BCCI was illegal and wrongful, DCHL said in the rejoinder, which Mint has reviewed.
“PVP Ventures bid was rejected because the terms of payment were not acceptable. PVP had offered Rs.90 crore in the first five years and balance Rs.450 crore in zero coupon debentures convertible into equity in 10 years,” the firm said in its rejoinder.
Deccan Chronicle had won the IPL team franchise in 2008 for $107 million (around Rs.589 crore today). The company also told the court on Monday that eight lenders, including ICICI Bank Ltd, Axis Bank Ltd and Yes Bank Ltd, have agreed to support it.
Mint reported on 19 September that a consortium of lenders have agreed to fund debt-laden Deccan Chronicle to allow the Deccan Chargers team to participate in the next IPL season. The offer by the consortium, comprising Yes Bank Ltd, Axis Bank Ltd, IDBI Bank Ltd, IDFC Ltd, Ratnakar Bank, SREI Infrastructure Finance Ltd and Religare Finvest Ltd, was spelt out in an affidavit filed by BCCI in the Bombay high court on 17 September.
During arguments in the court, BCCI had asked Deccan Chronicle to explain how it planned to run the team in the next season, for which the company needs Rs.150 crore.
“We have learnt that some other creditors such as Royal Sundaram have sent winding-up notices. We want to know who are their creditors and have they received any winding-up notice,” said BCCI lawyer Rafique Dada, adding that the ministry of corporate affairs is also investigating the company.
“The company is in the process of settling cases with Tata Capital and Future Capital,” said Zal T. Andhyarujina, lawyer for Deccan Chronicle. “BCCI has nothing to do with DCHL’s other creditors.”
The company is also fighting a winding up petition filed by IFCI in the Andhra Pradesh high court. Andhyarujina said that IFCI’s winding-up petition was not bona fide.
The media firm has a debt of “over Rs.4,000 crore”, according to the affidavit filed by BCCI in the Bombay high court on 17 September. A senior civil servant estimated the debt at Rs.5,000 crore.
Deccan Chronicle rose 0.31% to close at Rs.9.85 on Monday on BSE, outpacing the benchmark Sensex’s 0.42% loss.