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SPORTS:
TELECAST DEALS
Rights
and Wrongs
The CBI
steps up its drive against corruption in cricket by identifying suspect
TV deals and cracking down on the men behind them
By
Sayantan Chakravarty
When
the CBI's grim-faced investigators arrived at the giant iron gates of
10 Alipore, Calcutta, last week, the bells rang ominously for Jagmohan
Dalmiya. He kept the team waiting for an hour before relenting. Even as
the investigators moved into his plush home, similar searches were being
conducted on 24 other premises in Mumbai, Delhi, Lucknow and Bangalore
at the homes and workplaces of Doordarshan officials and television executives-men
known to Dalmiya.
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| FREEZE
FRAMED: (clockwise from left) Wimbledon 1997; IIC Knock-out 1998,
Dhaka; and the CBI raid on Dalmiya's residence in Calcutta |
The raid
on the home of the former president of the International Cricket Council
(ICC) was part of the CBI's sweep aimed at investigating what it calls
"murky dealings of Doordarshan officials". But unerringly, the
spotlight fell on Dalmiya, one of Indian cricket's most influential officials.
And the events that Monday morning had a particular resonance, coming
as they did days after the CBI's match-fixing report that indicted cricket
officialdom.
Unlike the
CBI's foray into the illegal dealings of bookies and their attempts to
bribe cricketers, telecast scams make for familiar territory. The deals
on the purchase and sale of TV rights for lucrative cricket events, suspects
the CBI, cost DD heavily through alleged overpricing during bids, dubious
negotiations by DD officials and preferential treatment to a group of
select TV companies. In return, the TV companies allegedly doled out favours
to the DD officials in kind.
The CBI
lodged five firs on DD's deals in sporting events, from the French Open
tennis championship in 1997 to the 1999 World Cup cricket tournament.
The agency estimates that the scams totalled over Rs 55 crore. The raids
covered the residences of six past and present DD officials involved in
the deals, as well as the premises of Mark Mascarenhas, chief executive
of WorldTel and Dalmiya's close friend.
After the
raids, a rattled Dalmiya said, "The CBI could have asked me for the
ICC papers instead of raiding my house, thus sparing my family the harassment."
The "papers" that he referred to are currently with the Income-Tax
Department which acquired them during a raid on July 20.
The raids
revived a controversial telecast deal that Dalmiya had struck as ICC president
with the DD-Prasar Bharati combine for the TV rights of the 1998 ICC Knock-Out
Trophy in Dhaka. While the fir in the Dhaka case does not name Dalmiya,
it refers to "officials of the ICC Development (International) Limited
(ICCDI) and the ICC", and Dalmiya was part of the negotiations for
ICCDI's TV deals. The event has haunted Dalmiya since April this year
when Arun Aggarwal, a former financial adviser in Prasar Bharati, produced
a report on the "DD sports consortium" and its TV deals, including
Dhaka. The consortium comprised private operators (WorldTel, Stracon,
UTV, Creative Eye) involved in the domestic marketing of DD's sports events.
The Aggarwal report, which named key cricket and TV figures, formed the
basis of the CBI investigation and the five firs registered on November
8.
What is
ominous for the raided parties-all the DD officials, as well as WorldTel,
and its partner in the Dhaka deal, Stracon India Pvt Ltd led by Siddharth
Ray-is that cases of criminal conspiracy and corruption have been registered
against them. Says CBI Special Director Gopal Achari who supervised the
raids: "We feel we have enough material to carry out a detailed probe."
The agency will now track the payments made overseas, particularly those
in the Dhaka deal. The trail is bound to lead the CBI to British Virgin
Islands, where the ICCDI is headquartered, to Monaco (where bidding for
the event took place), and to accounts in the Isle of Man (where payments
were made).
In the case
of the Dhaka deal, TV rights were divided into two segments-Indian (domestic)
and extra-Indian (rest of the world). The CBI has access to incriminating
documents that show Dalmiya guided DD to up its "Indian" rights
offer from $4 million to $8 million (Rs 1.76 crore to Rs 3.52 crore).
The evidence is in the form of DD Deputy Director-General Rakesh Bahadur's
notings in DD files, which state: "I was called for discussions on
February 27, 1998 (two days after the bids closed in Monaco) by David
Richards, the then ICCDI MD, who emphasised follow-up negotiations with
Dalmiya in Calcutta." Bahadur then met Dalmiya thrice in Calcutta.
Why, the CBI asks, did Dalmiya take such a keen interest in the DD bid?
The reasons
revolve around a three-way arrangement that was supposedly being worked
out a week before the bids closed. On February 18, 1998, the ICC reportedly
inserted a proviso in its bid document, insisting that 10 per cent of
the bid amount be paid up front as bank guarantee. Surprisingly, DD which
was bidding $11 million (Rs 4.84 crore) for both rights (Indian and overseas),
stated it could not afford the guarantee and so asked Stracon-a Rs 25-lakh
paid-up capital firm-to do the job. Stracon in turn asked Mascarenhas
to furnish the guarantee. WorldTel agreed even though it was a rival bidder
in the deal. In effect, the February 18 proviso enabled WorldTel to make
a "back door" entry into the fray through the bank guarantee
clause. Dalmiya may argue that as a good negotiator he was only helping
the ICC make more money on the telecast rights. But Bahadur has, unwittingly,
mentioned that he was, thanks to Dalmiya, privy to the bids of the rivals.
The probe
is not a knee-jerk reaction to the Aggarwal report or the match-fixing
scandal as there were rumblings over DD's earlier dealings too. The scams
surrounding three events-at Roland Garros, Wimbledon and the four-nation
Independence Cricket Cup of 1997-came to light following a letter from
television company TV Today on June 6, 1997. Written to Deputy Director-General
K. Kunhikrishnan, now a prime accused in the fir (and involved in all
the five cases), it said that "the marketing rights for both the
Independence Cup and French Open 1997 were given without calling for bids..."
Aggarwal's suspicions were raised by the TV Today letter and he was scathing
about the manner in which Stracon, with a bid of Rs 39.6 lakh, was handed
over the marketing contracts of the French Open even though TV Today put
in a bid of Rs 42.75 lakh.
For the
Independence Cup, the 1998 CAG report is more direct, providing a pointer
to the CBI. On March 14, 1997, DD set about negotiating the deal with
WorldTel India, headquartered at Bangalore. But five days later it signed
a memorandum of understanding (MoU) with WorldTel, USA. The result: DD
bore the entire income-tax liability of Rs 99.66 lakh on the earnings
of the Independence Cup. The then acting chief of DD, K.S. Sarma (whose
premises were searched in Delhi), did not think it fit to make a fair
estimate of production costs for the Independence Cup. Instead, DD made
an arbitrary estimate of Rs 2.5 crore and later forked out about Rs 3.4
crore as production costs for the event.
As for the
telecast rights of the 1999 World Cup in England, while the bids closed
on May 9, 1997, DD put up a note for purchasing the rights only 65 days
after the closing date. The bids were formally signed on December 5, 1998,
by which time DD had missed the bus, and had to buy the rights from the
ESPN-Star Sports combine which won the rights for $12 million for 42 matches.
DD had to pay $6 million to ESPN-Star to telecast eight of India's 11
matches. The idea, it would appear, was to benefit the Stracon-led consortium
by changing the revenue sharing formula in favour of the consortium from
70:30 in favour of DD, to 50:50 in favour of the consortium, using the
delay as the pretext.
Prasar Bharati
CEO Rajeeva Ratna Shah says he is "distressed" at the happenings
in DD, but adds: "If cleansing is required, cleansing will take place."
Says Stracon's Ray: "I do not feel victimised even though my name
features in the firs. The CBI has a job to do, they are doing that. I
have no grievances."
For the
past 18 months, open bidding has been instituted to avoid accusations
of murky dealings. Even so, the CBI must now ensure that there is a "cleansing"
or its drive against corruption in cricket will come to a screeching halt.
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