IPL Crisis: Deccan Chronicle rejects sole bid, BCCI to decide team's fate

The Hyderabad-based IPL team Deccan Chargers remained unsold today after the sole bid from the PVP Ventures was rejected on the basis of the payment terms offered by them.

Updated: September 13, 2012 18:01 IST
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Chennai: The Hyderabad-based IPL team Deccan Chargers remained unsold today after the sole bid from the PVP Ventures was rejected on the basis of the payment terms offered by them.

The Board of Control for Cricket in India said the offer met its eligibility and suitability criteria but was it was unacceptable to the DCHL.

"The bid that was received by Deccan Chronicle Holdings Limited met the BCCI's eligibility and suitability criteria.

The BCCI later issued a press release and said the Board had no role in Chargers' decision to reject the bid.

"The bid was then reviewed by Deccan Chronicle Holdings Limited who, in its discretion and with no role being played by BCCI, rejected the bid on the basis of the payment terms offered by the bidder," a BCCI release said.

The Deccan Chargers also reiterated it. "Price and terms are not acceptable," they said.

However some sources also say the PVP Ventures pulled out after the banks asked for collaterals and guarantees from them, nothing that was mentioned in the original bid document.

Asked if a new tender will be floated since the lone bid has been rejected, Srinivasan said, "You have to ask Deccan Chargers, now it's upto them. The franchise is on (exist). The BCCI has issued a notice to the franchise to clear certain defects. We have given them some time, but that is between BCCI and the franchise."

According to sources, bids could also be put out for a fresh team. The final decision will be taken in a BCCI Working Committee meeting on September 15.

Earlier this morning, the BCCI received just one new buyer after it opened the bids for the financially depleted franchise, with the base price reportedly of Rs 750 crore.

The PVP Ventures, owned by film producer PV Prasad, bid for the ownership rights of the team with that won the IPL title in 2009.

The Deccan Chronicle Holdings, which has defaulted on loans and owes lenders some Rs 5,000 crore, is shedding its cricket team to try and stave off bankruptcy.

A top BCCI official indicated that the Chargers' contract could be terminated at the Working Committee meeting and a new tender could be floated. There was also a possibility that the PVP company could be given the team.

"We will discuss the entire issue now and see what can be done. It is now up to the Working Committee to take a final decision on the issue," the official said.

Another top BCCI official expressed surprise that the bid of Rs 900 crore was rejected by Chargers.

"We are very surprised that a bid of Rs 900 crore plus has been rejected by Chargers. We thought that for a company that is in financial mess, the offer was a good one as it would have helped them clear their players' payment from the last edition. I guess they are being governed by the banks and that is the reason for rejecting the offer," the official said.

On what will be the next step for the BCCI, he said, "We need to wait till 5pm on September 15 when the timeframe of one month given to Deccan Chargers ends. If they don't pay the players' salaries, obviously the team would cease to exist. In any case they did a very wrong thing by mortgaging a BCCI property (IPL team) to the bank."

According to IPL constitution, the BCCI has right to encash the bank guarantee and pay the players' salaries from it. There is a precedence when Kochi Tuskers Kerala team was disbanded and BCCI encashed the bank guarantee.

Its accounts are also being forensically audited and the promoters face a criminal complaint for allegedly pledging shares twice over to borrow money.

The new potential buyer may have to pay the salary of the Deccan Chargers' players for the fifth edition of the IPL. The move will also help consortium of banks, which had loaned out significant amount to DCHL, to recover their money since the name of the team will remain Deccan Chargers.

The winning bidder had to meet BCCI’s eligibility criteria and other requirements. This was the first time an entire IPL franchise has been put on the block by its owners, although Rajasthan Royals sold a small stake in 2009 to the actress Shilpa Shetty and her husband Raj Kundra.

According to the tender notice, which had appeared a few days' back in national newspapers, "under this invitation to tender issued by DCHL, the winning bidder will acquire from the DCHL on an "as is where is" basis the right to own and operate the IPL team currently known as Deccan Chargers, which is and will continue to be based in Hyderabad and which competes in the Indian Premier League and which has the opportunity (if applicable and subject to qualification) to compete in each and any CLT20 which is staged from 2013 onwards".

The term "as is where is" means that the new buyer will have to use the name Deccan Chargers and will have to clear the liabilities of the current owner.

According to the IPL constitution, 5 per cent of the bidding amount will be acquired by the BCCI.

Earlier in June, DCHL had appointed investment banking institution, Religare to find a potential buyer but they were unable to find one, who would readily buy the team with its financial liabilities.

(With PTI Inputs)

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