N. Srinivasan’s controversial innings at BCCI12 min read . Updated: 28 May 2013, 05:28 PM IST
IPL spot-fixing latest in a string of near-misses that have earned the BCCI boss a reputation as a tough man to best
Chennai/New Delhi: Narayanaswami Srinivasan insists he won’t be railroaded into quitting as president of the Board of Control for Cricket in India (BCCI) in the aftermath of the latest controversy to roil the game—the spot-fixing and betting scandal that clouded the sixth edition of the Indian Premier League (IPL).
Not only has the scandal under Srinivasan’s watch led to the detention of three cricketers—all from the Rajasthan Royals team—and several bookies, it led last week to the arrest of the BCCI boss’s own son-in-law, Gurunath Meiyappan, in tandem with small-time actor Vindoo Dara Singh.
As Meiyappan remains in police custody and the extent of his professional role in Srinivasan’s IPL franchise Chennai Super Kings is subjected to media scrutiny, Srinivasan is keeping a careful distance, denying any wrongdoing and any knowledge of the affair.
On Sunday, before the IPL final between the Chennai Super Kings and the Mumbai Indians at the Eden Gardens in Kolkata, Srinivasan condemned the media for “relentlessly and unfairly" attacking BCCI.
“The public will disagree with you," he responded when a reporter suggested fans might boycott the final. “The fact that the final is sold out shows that cricket fans do not share your view."
He was only partly right. The 61,000 capacity stadium was full, but that didn’t stop fans from expressing their disdain when Srinivasan’s name was called for the post-match presentation ceremony. The packed stadium booed, bringing back memories of the Commonwealth Games (CWG) closing ceremony in 2010, when CWG chairman Suresh Kalmadi was treated to a similar reception after corruption scandals plagued the event.
Srinivasan did not seem fazed. Nor was he affected when Sahara Adventure Sports Ltd, owner of the Pune Warriors India team, announced its withdrawal from the IPL last week after BCCI encashed its bank guarantee for failing to pay its franchise fee. The Sahara group also threatened to withdraw its sponsorship of the Indian cricket team, but did not do so immediately, saying that it was not in the interest of the players or the sport. Expressing his “disgust" at the way the group had been treated despite a 13-year relationship with the board, chairman Subrata Roy said in an interview with NDTV that it would reconsider its decision only if the current regime stepped down.
But then, the episodes are only the latest in a string of professional near misses that have earned him a reputation over the years as a risk taker and a tough man to best, even in comparison to the string of high-ranking politicians, industrialists and former sportsmen who have held top posts within BCCI.
Nor is he the first BCCI official to refuse to budge under pressure; the institution has garnered a reputation for dictatorial opacity in recent years. A recent article in the Australian Daily Telegraph that dubbed Srinivasan “cricket’s most destructive figure" also noted that “India may be the world’s largest democracy but BCCI rules with a golden fist, rejecting any notion of good governance and free speech."
To be sure, BCCI isn’t the only sports body in India to face such criticism. Governing bodies of sports from football and tennis to hockey and shooting have been accused of allowing themselves to be run like the personal fiefdoms of the powerful and politically connected. The International Olympic Committee (IOC) in December suspended the Indian Olympic Association (IOA), citing “its failure to comply with the Olympic Charter and its statutes, failure to inform IOC in a timely matter, and as a protective measure against government interference in IOA’s election process".
But BCCI, as India’s richest sporting body administering the country’s most popular sport, and the people who run it are under public glare like no other association and no other administrator.
For Srinivasan, who steered his father’s company India Cements Ltd, through a near fatal period of losses in the 1990s, the game offered an opportunity to bolster its brand through the reflected glow of IPL. He admitted as much in a 2008 conference call with a group of analysts.
“It is not a sudden, impulsive act," he said of India Cements’ entrance into IPL with the Chennai franchise. “This was a very clear, cold analytical position with a view to solely building our brand more extensively and deeply throughout the important market that we have, which is Tamil Nadu. Now what we have come up with is a very innovative method of improving our brand without spending anywhere near the money my competitors have spent."
It’s been a bumpy ride. Several of Srinivasan’s erstwhile benefactors have ended up as his enemies, notably A.C. Muthiah, the man who gave him a leg-up onto the first rung of the ladder in the Tamil Nadu Cricket Association (TNCA), and who is now suing him in a conflict of interest case pending in the Supreme Court, which has been highlighted in the wake of the spot-fixing allegations against Meiyappan.
As Muthiah put it: “Only after spot fixing have people woken up to the fact of conflict of interest between Srinivasan, president of BCCI, who also owns an IPL franchise, Chennai Super Kings, which I have been saying for years." He refused to comment further on his soured relationship with his erstwhile friend. Srinivasan also declined to speak to Mint for this story.
“Srini", as he is known to his friends, lives a lifestyle that befits a 68-year-old cement magnate. He plays a lot of golf, drinks Scotch, wears a Rolex and consorts with influential people. He has a reputation for being both ruthless and single-minded. “He is passionate about two C’s—cement and cricket," said a close associate who did not want to be named.
India Cements posted a net revenue of ₹ 5,159.47 crore for the 2013 fiscal, up 11% over the previous year. The company has seven cement plants—three in Tamil Nadu and four in Andhra Pradesh. The company was set up by Srinivasan’s father, T.S. Narayanaswami, in 1946 in partnership with a banker, S.N.N. Shankarlingam, who also promoted the Sanmar Group, with interests in chemicals, shipping and corporate farming. In 1949, the company commissioned its first cement plant at Sankarnagar with an installed capacity of 100,000 tonnes.
Srinivasan is the eldest of two boys and two girls. After his father’s sudden death in 1968, having just completed his Master of Science in chemical engineering at the Illinois Institute of Technology in Chicago, Srinivasan returned to India and joined the firm as deputy managing director. He worked with K. S. Narayan, the son of Shankarlingam, eventually becoming managing director.
By the early ’80s, the relationship between the founders’ sons had turned sour, according to a close associate who asked not to be named. After a court battle, Srinivasan was stripped of his position and any control of the company’s operation. An institutional investor, Industrial Development Bank of India (IDBI), was given control of the firm.
But Srinivasan fought back. In 1989, when the Dravida Munnetra Kazhagam (DMK) came to power in Tamil Nadu, Srinivasan bought the stake owned by IDBI with the help of his close friend, the late politician Murasoli Maran, nephew of the DMK leader M. Karunanidhi. It was good timing on Srinivasan’s part: while cement had been under-priced in the 1970s, and its distribution controlled by the government, in 1989 the government relaxed its control. Within a year, India Cements had become the largest cement producer in south India, having acquired Coromandel Cement in Cuddapah, Andhra Pradesh, which had an installed capacity of 2.6 million tonnes (mt) per annum.
Meanwhile, Srinivasan had extended his reach into areas like shipping, which brought him into competition with the Sanmar group, as well as into financial services through Aruna Sugars Finance which was renamed India Cements Capital and Finance Ltd after its acquisition in 1997. That year, India Cements had a capacity of 3.5 mt, which would treble to 9 mt over the next four years, thanks to Srinivasan’s aggressive acquisition strategy including the Visaka cement plant, state-owned Cement Corporation of India’s Yerraguntla plant, Shri Vishu Cement and Raasi Cement.
The Raasi takeover in 1998 prompted a fair amount of media attention. Srinivasan’s “killer instinct" was remarked upon in an article in Outlook magazine that called him “the first fiercely competitive businessman to emerge from the south... He has mastered the art of friendly as well as hostile takeovers. He uses his political connections very subtly so that very few notice the series of coincidences. Especially the role of godfather Murasoli Maran, former Union industries minister".
But the string of acquisitions came at the cost of ₹ 1,000 crore of debt, reflected on the books of the company, which made a loss (before tax) of ₹ 7.5 crore on a revenue of ₹ 1,313 crore in 2001-02. Srinivasan had not anticipated a drop in demand for cement and a fall in prices in southern markets. When the state government decided to phase out sales tax concessions for fresh capacities, Srinivasan was caught on the wrong foot and forced to sell his shipping business and properties.
Even after divesting its stake in Shri Vishnu Cement for ₹ 385 crore, the company’s health continued to deteriorate until it was on the brink of closure, burdened with debt. In 2003, the Reserve Bank of India cleared India Cements’ corporate debt restructuring, stating that ₹ 800 crore of capital should be infused by March 2006.
Srinivasan convinced Hong Kong-based fund manager Asia Debt Management to step in with a lifeline of $149 million (about ₹ 655 crore) in December 2004 by way of debt and equity, and cut costs by trimming the workforce. By the following year, after three years of losses, India Cements was back on the growth curve. In October 2005, the company went for a $100 million issue of global depository receipts.
At the same time, Shankarlingam’s grandson, N. Shankar, at the Sanmar group, decided to divest a part of its stake in the company. Rather than risk losing control in an open offer, says the close associate cited earlier, Srinivasan bought the stake for ₹ 192 crore. In the next two years, Sanmar’s remaining stake was acquired by Srinivasan for ₹ 124 crore. In 2009, he consolidated his stake to 28% by buying out his brother N. Ramachandran, who was the executive director of India Cements.
Srinivasan’s move into cricket began in 2001, when his company remained in the doldrums, though he maintains that India Cements had supported cricket from his father’s era. “Many Ranji Trophy players were employed in the company. When there was no money in the sport, we were promoting cricket and cricketers," he told Mint in a 2012 interview. Today, about 40 cricketers are full-time employees, including state-level cricketers as well as prominent players such as Rahul Dravid, R. Ashwin, L. Balaji, S. Badrinath and Dinesh Karthik, with Indian cricket captain M.S. Dhoni being among the latest to be recruited. Dhoni was made a vice-president of the company in February this year.
He was helped by an old school friend from Madras Christian College Higher Secondary School in Chennai who was then president of BCCI—Muthiah. According to a veteran sports journalist, who did not want to be named, Muthiah deferred the annual general meeting of the Tamil Nadu Cricket Association (TNCA) by three months in order to bring Srinivasan onto the board, as well as suggesting he contest from Vellore district, so that he would have a better chance of winning presidential elections within the organization. The following year, Srinivasan became president of TNCA. By 2005, he was appointed BCCI treasurer.
There are those who attribute Srinivasan’s swift rise to nepotism and others who say he has done no better or worse than his predecessors in the job.
“To get to the top at BCCI requires one to be, for lack of a better word, ‘enterprising’ and definitely manipulative," said Kadambari Murali Wade, former editor-in-chief at Sports Illustrated India, who has covered cricket for close to 13 years.
Srinivasan has his share of admirers. “He is a very thorough professional and understands things better," said a consultant for an IPL franchise who did not want to be named. “He is more hands on in a corporate way and knows how to delegate. He does not bother about what others say."
The consultant acknowledged Srinivasan might have cultivated or manipulated BCCI insiders “as past presidents have done", but said that nevertheless he “stands out in the group" for his efficiency. “At the moment, the issue is related entirely to IPL and not to BCCI or cricket in general," the consultant said. “But I agree there is an obvious conflict of interest. The change will not come from within BCCI, which is a closed club. Change will come only from the outside, either imposed by the government or the courts."
Sunder Raman, chief executive, IPL, and Ratnakar Shetty, chief administrative officer of BCCI, declined to comment. It wasn’t until 2008 that Muthiah filed his complaint against Srinivasan to the then BCCI president, complaining that his erstwhile protege had violated a clause of the IPL’s regulations for players, team officials, umpires and administrators that stated that no administrator should have a direct or indirect commercial interest in the matches or events conducted by the board.
Muthiah said India Cements’ ownership of Chennai Super Kings amounted to such a commercial interest on the part of Srinivasan and he was liable to be penalized as the managing director of the company, a franchisee of IPL. Three days later, according to a story reported by Mint at the time, an amendment to the rules was made by BCCI to the clause “excluding the IPL, Champions League and Twenty20".
Muthiah subsequently filed a civil suit in the Madras high court, which dismissed it, prompting him to move the Supreme Court in 2010. In April 2011, a two-judge bench of the apex court gave a split verdict and referred the petition to the chief justice for allocation to a larger bench, which has yet to take happen.
In an interview with Mint in 2012, Srinivasan dismissed Muthiah’s motives as jealousy. “I didn’t think Mr Muthiah would stoop to this level after he lost an election to me," he said, referring to his victory over Muthiah in TNCA’s presidential election of March 2010.
In 2011, the Chennai Super Kings were labelled by UK-headquartered valuation agency Brand Finance as the most valuable cricket franchise in IPL. But, according to analysts, not everyone was happy that India Cements had moved into sports. “Investors were not entirely happy with the company’s decision to venture into IPL. The investors have not given any value for the stock because of CSK—when CSK does well, we don’t see the stock doing great," said an analyst who did not want to be named. “The company has invested $91 million for a period of 10 years, and it has paid 60% of that sum till now. Now that even after six years it has not broken even, it will be more difficult going ahead, with all the problems that is happening around CSK." The India Cements stock’s value has fallen 19.7% in the last week.
In response to the allegations of spot-fixing, BCCI has appointed a three-member disciplinary panel comprising BCCI treasurer Ajay Shirke, former cricketer Ravi Shastri and a retired high court judge to investigate Gurunath Meiyappan’s role. Announcing the committee, Srinivasan remained adamant: “I’ve not been asked by anybody to resign," he said. “To the contrary, my support is complete and I refuse to yield into unfair and motivated attacks."
Gouri Shah in Mumbai, and Vidhi Choudhury and Shauvik Ghosh in New Delhi contributed to this story.