Poor Lalit Modi. He went a little too fast with his scam and partied a little too hard in front of public eyes. As per a confidential income tax report, he bought a luxury yacht, a private jet, haveli’s in Rajasthan, a fleet of Mercedes S-class cars and what not! All in the last three years! He gave every possible deal to do with IPL to his relatives and family and friends or to people whom he owed money – so that they don’t come behind him. Again, this is as per that report which came out in The Economic Times. More, he took personal stakes in disguise in three of the IPL teams and is supposed to have been himself involved in fixing the outcomes of IPL matches along with a prominent page 3 personality; again according to the same report.
He is linked to Betfair – a UK firm that runs one of the world’s largest betting syndicates on the internet – and is helping it to enter the casino and hospitality business in India! This is what the Income Tax Department scooped out from Lalit Modi’s email box. And all this an unbelievable six months back. But then the government didn’t take any action till Modi in his stupidity tried to publicly challenge Tharoor because Tharoor gate-crashed into Modi’s IPL party while he wanted to give that franchise to another big industrial house along with a couple of more film stars! And then Tharoor broke free and brought in the counter allegations, which everyone knew about but was maintaining the conspiracy of silence hoping to join the party at the right time. Of course, a number of government people are already involved!
But this is what you all almost already know by now. This is not what I want to elaborate upon. The bigger issue is something else. This is not something new. It’s something that is happening in India all the time. Ever since Independence, our focus has been to privatise every public good available through unfair means to allow private businessmen to profit, and in the process helping government middlemen make money. Sports in India is a public good. Cricket is a national craze. Then, is it fair to privatise this activity, is the bigger question in hand. Well, truthfully speaking, I am not against privatising sports. Worldwide privatisation of sports has helped nurture and encourage sports at a local level and bring in amazing talent. Case in point is the European football clubs, the British premier leagues. It’s the working class people whose children are the star players today; kids from the streets getting into the various clubs and making it big regularly. Club games and such leagues necessarily promote sports and encourage fresh talent. So privatising sports – especially cricket which Indians are so passionate about – is not a bad idea. But what is wrong is privatising it through a coterie and distributing it amongst themselves. Cricket is nobody’s father’s property. No one has the right to privatise it and distribute it between friends and family. It has to fairly go to the best bidders, because it is guaranteed money and valuations. Readers of this magazine will remember when IPL franchisees were distributed, I had written in this same column that there surely is unfair play. Many people couldn’t have surely afforded the teams on merit. Then, of course, I came to know that people who paid Rs.300 crores for a team never actually paid it. They had to pay it in a span of ten years at Rs.30 crores every year. That’s only Rs.2.5 crores per month. That too I doubt how many people had to actually pay. For it was decided that all the sponsorship money being earned on IPL would be divided in a particular ratio and distributed amongst the franchise holders -which comes to a whopping Rs 65 crores approx. per team. So there is all probability that if the due to the franchisee was Rs.30 crores in a year, he actually did not pay anything rather actually got back Rs. 35 crores the differential to meet all the other expenses of buying players etc and have profits too! So, of course, all the Modi’s friends and family could afford it!
And as I was saying, this is not an exception. Look at mining licences in India. Look at the way top oil companies have done all the researches, identified the oil fields and then instead of digging for oil, closed it saying there is no oil. And secretly sold the reports to private players, who then suddenly reach the fields, discover hidden oil like magic and make billions and then enter the Forbes list of billionaires!!! Or look at the way government would take over failed companies through BIFR and then sell assets worth ten times at a tenth of the value and take kickbacks in return.
He is linked to Betfair – a UK firm that runs one of the world’s largest betting syndicates on the internet – and is helping it to enter the casino and hospitality business in India! This is what the Income Tax Department scooped out from Lalit Modi’s email box. And all this an unbelievable six months back. But then the government didn’t take any action till Modi in his stupidity tried to publicly challenge Tharoor because Tharoor gate-crashed into Modi’s IPL party while he wanted to give that franchise to another big industrial house along with a couple of more film stars! And then Tharoor broke free and brought in the counter allegations, which everyone knew about but was maintaining the conspiracy of silence hoping to join the party at the right time. Of course, a number of government people are already involved!
But this is what you all almost already know by now. This is not what I want to elaborate upon. The bigger issue is something else. This is not something new. It’s something that is happening in India all the time. Ever since Independence, our focus has been to privatise every public good available through unfair means to allow private businessmen to profit, and in the process helping government middlemen make money. Sports in India is a public good. Cricket is a national craze. Then, is it fair to privatise this activity, is the bigger question in hand. Well, truthfully speaking, I am not against privatising sports. Worldwide privatisation of sports has helped nurture and encourage sports at a local level and bring in amazing talent. Case in point is the European football clubs, the British premier leagues. It’s the working class people whose children are the star players today; kids from the streets getting into the various clubs and making it big regularly. Club games and such leagues necessarily promote sports and encourage fresh talent. So privatising sports – especially cricket which Indians are so passionate about – is not a bad idea. But what is wrong is privatising it through a coterie and distributing it amongst themselves. Cricket is nobody’s father’s property. No one has the right to privatise it and distribute it between friends and family. It has to fairly go to the best bidders, because it is guaranteed money and valuations. Readers of this magazine will remember when IPL franchisees were distributed, I had written in this same column that there surely is unfair play. Many people couldn’t have surely afforded the teams on merit. Then, of course, I came to know that people who paid Rs.300 crores for a team never actually paid it. They had to pay it in a span of ten years at Rs.30 crores every year. That’s only Rs.2.5 crores per month. That too I doubt how many people had to actually pay. For it was decided that all the sponsorship money being earned on IPL would be divided in a particular ratio and distributed amongst the franchise holders -which comes to a whopping Rs 65 crores approx. per team. So there is all probability that if the due to the franchisee was Rs.30 crores in a year, he actually did not pay anything rather actually got back Rs. 35 crores the differential to meet all the other expenses of buying players etc and have profits too! So, of course, all the Modi’s friends and family could afford it!
And as I was saying, this is not an exception. Look at mining licences in India. Look at the way top oil companies have done all the researches, identified the oil fields and then instead of digging for oil, closed it saying there is no oil. And secretly sold the reports to private players, who then suddenly reach the fields, discover hidden oil like magic and make billions and then enter the Forbes list of billionaires!!! Or look at the way government would take over failed companies through BIFR and then sell assets worth ten times at a tenth of the value and take kickbacks in return.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
Prof. Rajita Chaudhuri's Website
domain-b.com : IIPM ranked ahead of IIMs
Arindam Chaudhuri's Portfolio - he is at his candid best by Society Magazine
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
IIPM B-School Detail
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
Prof. Rajita Chaudhuri's Website
domain-b.com : IIPM ranked ahead of IIMs
Arindam Chaudhuri's Portfolio - he is at his candid best by Society Magazine
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
IIPM B-School Detail
