Mumbai, Sep 21: The Board of Control for Cricket in India (BCCI) on Saturday refuted Foreign Exchange Management Act (FEMA) contravention claims that appeared in a newspaper report. BCCI said all payments made during IPL 2 in South Africa were "bona fide and legitimate".
According to "The Hindu" the Enforcement Directorate (ED) had charged BCCI with foreign exchange violations of over Rs 1,600 crores. However, in a media statement stating that "reported violation of Rs. 1600 crores mentioned in the report is misleading".
Here is the full statement from BCCI
"The BCCI's attention has been drawn to a report in "The Hindu" about Show Cause Notices issued by the Enforcement Directorate to the BCCI and its officials alleging that the BCCI had contravened FEMA by remitting Rs 283 crores to Cricket South Africa and paying IMG Rs. 88.48 for services in the conduct of the IPL. The BCCI wishes to clarify that these Show Cause Notices were issued in July 2011 and October 2011 and that the BCCI has given detailed replies refuting the charges. The BCCI also wishes to clarify that the reported violation of Rs. 1600 crores mentioned in the report is misleading. The total foreign exchange payments made to CSA and IMG covered by these notices were only Rs 283 crores but adding up charges of contraventions of multiple provisions of FEMA has resulted in this figure.
The BCCI reiterates that these payments were bona fide and legitimate. IMG had been engaged in order to provide expert assistance in conducting the IPL to international standards. IPL 2 was shifted to South Africa in 2009, since the Government of India was unable to make the necessary security arrangements since its forces were deployed for election duty. Rather than cancel IPL 2, which would have led to loss of prestige for India as a cricketing nation and led to loss of foreign exchange income by way of telecast rights, the BCCI shifted the tournament to South Africa. The agreement with Cricket South Africa was made in accordance with a well-established ICC practice by which the host country association organises international matches on a cost plus basis. CSA had organised such matches for ICC in the past. The BCCI has organised matches for ICC in India on the same basis.
In reply to these Notices, the BCCI has pointed out that these transactions led to increased foreign exchange for India and that the BCCI had been professionally advised that these remittances were "current account transactions" that did not require prior approval of RBI. Further these remittances were made through an Authorised Dealer viz. a Nationalised Bank that is licensed by the RBI to conduct foreign exchange transactions after furnishing all the required documents and information called for, none of which is alleged to be false. The BCCI has pointed out that there is no allegation that these remittances benefited any individual, or that there was loss of foreign exchange for India.
The BCCI reiterates that it is committed to the highest standards of compliance with all Indian laws and regulations and is confident that its stand would be upheld."