Mumbai: The Competition Commission of India (CCI) imposed a penalty of Rs.52.24 crore on the Board of Control for Cricket in India (BCCI) for alleged abuse of its dominant position in violation of norms. Under the order, BCCI has to deposit the money within 90 days of the receipt of the CCI order.
The penalty imposed on BCCI amounts to 6% of its average annual revenue (Rs.870.78 crore) for the three years, 2007 to 2010, according to the order, which was posted on CCI’s website.
According to the CCI order, Surinder Singh Barmi, a Delhi-based cricket fan, had alleged irregularities in the grant of Indian Premier League (IPL) franchise rights for team ownership, media rights for coverage of the league, and in the award of sponsorship rights and other local contracts related to the Twenty20 league conducted by BCCI. Barmi had submitted the information to CCI in November 2010.
CCI has raised questions over BCCI misusing its position by blocking players who could have opted for competitive leagues such as the Indian Cricket League started by Subhash Chandra-promoted Essel Group.
“BCCI knowing this had foreclosed the competition by openly declaring that it was not going to sanction any other event. BCCI undermined the moral responsibility of a custodian and de facto regulator,” said the CCI order.
CCI has directed BCCI to “cease and desist” from any practice in future denying market access to potential competitors and not use its regulatory powers in deciding matters relating to its commercial activities.
“BCCI will set up an effective internal control system to its own satisfaction, in good faith and after due diligence,” said the CCI order.
Rajeev Shukla, BCCI vice-president and chairman of IPL, did not respond to calls and text messages.
The CCI order cited alleged attempts at the rigging of bids and the grant of IPL team ownership by “using arm-twisting tactics” by then IPL commissioner Lalit Modi. BCCI cannot be absolved from responsibility in the tendering process as all the decisions were ratified by the governing council on a regular basis, CCI said.
The commission said the minimum fee of $50 million (around Rs.270 crore today) fixed by BCCI for the grant of franchise rights was a very high capital cost of entry. BCCI, however, contended that the minimum floor price pre-requisite was “not unreasonable and based on commercial expedience”.
According to CCI, the IPL team (ownership) agreements were unfair and discriminatory, as the franchise owners needed to seek prior permission from BCCI for a part or complete sale of the team. The terms of the IPL franchise agreements were loaded in favour of BCCI and franchises had no say in the terms of the contract, said the CCI order.