The clouds of a potential conflict interest are hovering over Indian cricket again with captain Virat Kohli’s investment in the BCCI’s (Board of Control for Cricket in India) official kit sponsor and merchandise partner from February 2019 has come to the fore.
A report in the Indian Express says Kohli was allotted Compulsory Convertible Debentures (CCDs) for Rs 33.32 lakh in Galactus Funware Technology Private Limited, a Bengaluru-headquartered company, which owns the online gaming platform Mobile Premier League (MPL).
Galactus is a subsidiary of M-League Pte Ltd, a company registered in Singapore in April 2018.
What’s The Deal?
MPL Sports was named as the BCCI’s new kit sponsor and merchandise partner for the Indian cricket team on 17 November, 2020. The deal is for three years and senior Indian men, women and under-19 teams are sporting the logo of MPL on the arm. The Indian captain had been named brand ambassador of the brand earlier in January 2020.
The report further adds that Kohli was allotted 68 CCDs with a face value of Rs 10, each issued at a premium of Rs 48,990 (Rs 33.32 lakh). These CCDs will be converted into equity shares at the end of 10 years, the conversion ratio being 1:1, leaving the captain with a a 0.051 per cent stake in the company post dilution.
In the same extraordinary General Meeting, Cornerstone Sport CEO Amit Arun Sajdeh received CCDs worth Rs 16.66 lakh as well. Sajdeh happens to be Kohli's partner in at least two companies.
Cornerstone Sport and Entertainment Private Ltd manages the commercial rights of Kohli and a bunch of international cricketers including KL Rahul, Rishabh Pant, Umesh Yadav, Ravindra Jadeja, Kuldeep Yadav and Shubman Gill.
Is Kohli Free to Invest?
Sajdeh told Indian Express that Kohli had no restrictions in investing in any business.
“I have said this time and again, Virat and Cornerstone are free to invest in as many businesses as they wish to. There is no conflict whatsoever as long as Virat is not invested in Cornerstone,” he said.
The BCCI’s constitution does raise a flag about such commercial connections. It defines Commercial Conflict as: “When an individual enters into endorsement contracts or other professional engagements with third parties, the discharge of which would compromise the individual’s primacy obligation to the game or allow for perception that the purity of the game stands compromised.”
The Board officials have put the onus on the BCCI Ethics Officer Justice DK Jain.
"This case falls under the purview of Justice DK Jain, the Ethics Officer-cum-Ombudsman. As far as the Board is concerned, it can't do much. Besides, this appears to be a very small, insignificant investment and was done over one and a half years before the MPL got the rights. It is hard to establish if he knew that this company would invest in BCCI's kit. Also the 0.051 per cent stake doesn't give him much influence and none of the directors/owners in the company co-own or are co-directors of any other company with Kohli," a BCCI official was quoted as saying by IANS.
"It is surprising that the Ombudsman/Ethics Officer hasn't come out with a response on the earlier complaint. Don't understand why is there a delay. There definitely seems to be a conflict in the earlier case. But in this one, there is no direct relative or partner who owns Galactus and as per the constitution you cannot find a clause to hold him guilty of breaching conflict of interest code. However, it is beginning to show the clout that Kohli and Cornerstone are beginning to have in Indian cricket," said the official.
A few years back, BCCI had asked Sunil Gavaskar to divest his shares in Professional Management Group, a firm handling players, as he was in a commentary contract with the BCCI. Gavaskar's request of selling it to his relative was turned down and he was asked to sell it to someone not related to him.
(With various inputs)
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