Thread by @KShriniwasRao

#THREAD #IPL #FRANCHISE #BCCI #CVC

As I tweet this, the BCCI and CVC Capital, and their respective lawyers, are locked in a meeting in Dubai. There has been some serious discussion going on all day. As I said earlier, it’ll be a travesty if CVC are forced out of IPL. (1/22)

The Private Equity Company has close to 24 offices globally and they operate under the laws of that country. Similarly, in India, they’re bound by the law of the land here. CVC ticked all eligibility criteria before submitting the bid. (2/22)

BCCI, in its tender document had submitted a list of eligibility rules. The BCCI also went through checks to see if all bidders were meeting the eligibility criteria. I went through the documents to see what exactly is the eligibility criteria. Here’s a full list. (3/22)

2.3 Eligibility to Bid
(a) … must each satisfy the requirements of Section 2.4.1 and 2.4.2 below.

2.4.1 Bidder’s Financial Standing
(a) Average Turnover of each Bidder for the last 3 years must be at least INR 3000 cr only as per last 3 audited accounts.

OR (4/22)

Average Net Worth of each Bidder for the last 3 years must be at least INR 3000 cr as per the last 3 audited accounts.
The “Turnover” shall mean annual audited turnover of the Bidder together and “Net Worth” shall mean the aggregate value of the paid-up share capital. (5/22)

2.4.2 Fit and Proper Person
(a) Each Bidder must be a Fit & Proper Person. In order to determine this, BCCI may take into account any factor, as may be deemed fit by BCCI, including without limitation any one or more of following criteria: (6/22)

(i) not having been convicted by a court of a criminal offence or offences involving moral turpitude, economic offence or fraud; (ii) not having any conflict of interest as per the BCCI Conflict of Interest Rules; (7/22)

(iii) absence of conviction for any offence punishable with imprisonment for 2 (two) years or more in any jurisdiction; (iv) absence of categorisation as a wilful defaulter by the Reserve Bank of India; and/ or … (8/22)

(v) a Person having integrity and reputation and BCCI reserves right to reject any Bid from any Bidder which in BCCI’s opinion and at its discretion does not satisfy this criteria. The following persons must also be Fit and Proper Persons in relation to any Bid or Bidder: (9/22)

(i) any person who (directly or indirectly) owns shares in or has any interest of any kind in any corporate which is a Bidder whose shares are unlisted and any person who (directly or indirectly) owns 5% or more of any corporate which is a Bidder whose shares are listed; (10/22)

And.. … (ii) each Parent Company and every subsidiary Company of the Bidder, and where the Net Worth and Turnover of a Group company is considered, such Group company should also be a Fit and Proper Person… (11/22)

(b) Bidders, and in the case of Bid submitted by a Consortium, members of the Consortium, which are body corporates must not be incorporated in jurisdictions which are considered by BCCI to be tax havens and/or... (12/22)

... where the standards of financial regulation, corporate governance and disclosures are unacceptable to BCCI in its sole and absolute discretion (“BCCI’s Suitability Standards”). (13/22)

In the event that any corporate entities which are shareholders or proposed shareholders in the proposed New Franchisee/ Bidder/ any member of Consortium (as applicable) are incorporated in such tax havens or jurisdictions which may be unacceptable to BCCI ... (14/22)

… the Bidder will be required to provide detailed chart of shareholding in such Bidder or its ultimate Parent Company and the details of ultimate owners/ beneficiaries of all corporate shareholders in such Bidder/ any member of Consortium (as applicable) or ... (15/22)

… its ultimate Parent Company shall be provided along with the Tender Documents as a material obligation of the ITT and any share/ security transfers related thereto dating back 2 (two) years prior to the submission of the Bid. (16/22)

(c) It should be noted that, in addition to the above, each Bidder and in the case of a Consortium Bid, every member of the Consortium which are corporate entities, must not be incorporated in jurisdictions/ territories with which India does not have friendly relations. (17/22)

In the event any body corporate(s) which are shareholders or proposed shareholders in the Bidder/ any member of Consortium (as applicable) incorporated in jurisdictions/ territories with which India does not have friendly relations, Bidder/ any member of Consortium … (18/22)

… will be required to provide a detailed chart of the shareholding in such Bidder/ member of the Consortium (as applicable) or its ultimate Parent Company and the details of ultimate owners/ beneficiaries of all shareholders which are body corporates in such Bidder... (19/22)

… or its ultimate Parent Company along with the Bid Documents as a material obligation of the ITT, and any share transfers related thereto dating back 2 (two) years prior to the submission of the Bid. (20/22)

Any Bid submitted by Person that is Connected to a corporate entity that is incorporated in such jurisdictions/ territories may be rejected by BCCI in its absolute discretion notwithstanding that such entity otherwise fulfils eligibility criteria set out in this ITT. (21/22)

To end this, there is not a single word on whether or not a bidder's sister concern or parent company should be or not be associated with any specific business in another country... as long as it is legal in that country. Where's the confusion? (22/22)