Lalit Modi's SC Plea Highlights ED's IPL Finances Investigation

Modi's Supreme Court Plea Sheds Light on ED Investigation into IPL Financial Dealings

New Delhi: A petition filed by former IPL chairman Lalit Modi in the Supreme Court has brought renewed attention to an ongoing investigation by the Enforcement Directorate (ED) into alleged financial irregularities surrounding the second season of the Indian Premier League (IPL). The IPL season 2 was held in South Africa in April-May 2009.

Modi is urging the Supreme Court to direct the Board of Control for Cricket in India (BCCI) to pay a ₹10 crore penalty to the ED on his behalf. He has attributed all decisions and liabilities related to the league to the board.

The IPL-2 was moved to South Africa after the Union Home Ministry expressed its inability to provide adequate security for the matches due to the Lok Sabha elections.

During its investigation, the ED uncovered financial irregularities in the conduct of IPL-2. The agency claimed that the BCCI and its officials violated foreign exchange regulations and conducted transactions without informing the Reserve Bank of India (RBI).

A case of FEMA violation was initially filed in November 2011. However, the matter remained dormant until April 2015, when the ED initiated adjudicating proceedings and served 11 notices to the BCCI and its officials for personal hearings.

In the show-cause notices, the ED accused the BCCI of violating RBI guidelines and FEMA rules by remitting ₹243 crore to Cricket South Africa (CSA), allegedly without the necessary permission from the central bank. These remittances were made from the BCCI's bank account at the State Bank of Travancore, Jaipur branch, to cover expenses incurred by CSA on behalf of the BCCI for conducting the IPL.

The adjudicating authority of FEMA noted that instructions for the initial fund transfers were given by the BCCI on March 28, 2009, prior to the agreement with CSA. Furthermore, the final two remittances were made after the tournament's conclusion, with the last remittance of $10,362,799 occurring 15 months later.

The ED probe also revealed ₹44 crore in payments by the BCCI that remained "unaccounted for and unexplained," leading to the imposition of a penalty. According to case proceedings, these payments were made to an alleged 'proxy' account maintained by the BCCI in South Africa, violating FEMA rules.