The Supreme Court order prevents N Srinivasan from running for office while also owning IPL franchise Chennai Super Kings. With the election scheduled to be held in six weeks, we break down Srinivasan’s options and figure out whether it is possible for him to resolve his conflict of interest in time to run for BCCI president.
Has the Supreme Court barred N Srinivasan from standing for BCCI president?
No. The Supreme Court has left the door ever so slightly ajar. The court’s order states that “no one who has any commercial interest in the BCCI events (including Mr. N. Srinivasan) shall be eligible for contesting the elections for any post whatsoever.”
But if India Cements, of which Srinivasan is the Managing Director and Promoter, were to sell the Chennai Super Kings, Srinivasan would no longer have any commercial interest in the BCCI and could in theory stand for board president.
What would it take for Srinivasan to have no commercial interest in the BCCI?
He would either have to sell his shares in India Cements and walk away from the company or sell Chennai Super Kings, which is a wholly owned subsidiary of India Cements.
Since Srinivasan’s family owns roughly 30 percent of India Cements, and his day job is Managing Director of the company, the realistic option is selling CSK.
It is possible to sell CSK in six weeks?
In theory, yes. According to corporate legal consultant Devesh Pandey, it is “not impossible” for Srinivasan to pull off the transaction in that time. The legal and statutory requirements can be completed in 10 to 15 days if CSK is not a material subsidiary* of India Cements. If it is a material subsidiary, then it would take roughly a month, Pandey told Firstpost.
If CSK is not a material subsidiary, the only requirement under the 1956 Companies Act is to call a meeting of the board of directors and pass a resolution authorising the transfer of shareholding to a third party. The meeting requires seven days notice. Once the resolution is passed, then it is simply a question of drafting the share purchase agreement and signing off on the deal.
However, if CSK is a material subsidiary, then any resolution authorising a sale can only be taken at an AGM or EGM, which require 21 clear days notice and two-thirds of all shareholders to vote in favour of the deal, Pandey said. This would naturally be harder to pull off, since the interests of shareholders are likely to differ from Srinivasan’s personal interest in running Indian and world cricket.
Then there are BCCI’s regulations governing the sale. According to ESPNcricinfo, “Such a proposal is first put forward to the IPL governing council and then either working committee or the AGM. Considering that the BCCI AGM has to be held in six weeks, there will be only one working committee meeting.”
In effect, that shrinks the time Srinivasan has to sell the team even further. He needs both India Cements and the BCCI to approve any bid to sell the team to a third party.
All this presupposes a willing and eager buyer who has no interest in doing due diligence on the team and its precarious legal situation. That’s less than likely.
But couldn’t Srinivasan simply hand over the team to a proxy?
He could but he risks earning the ire of the Supreme Court if he does. Also, anybody he sells the team too will be scrutinised by those opposed to him and there is every chance the sale will be challenged in court if there are doubts about the buyer.
So it won’t be easy to find a buyer?
Exactly. The IPL’s credibility has been damaged and CSK’s very survival beyond this season is uncertain. The three-judge committee appointed by the Supreme Court could well decide to scrap CSK as punishment for the actions of team official Gurunath Meiyappan, whom the court found guilty of betting on IPL matches.
A prospective buyer would have to be willing to take such a risk and its hard to imagine anyone with genuine intentions doing so.
Doesn’t that mean Srinivasan is effectively locked out of the election?
Well, it is likely he won’t be able to contest. But Srinivasan won’t go quietly into that good night. He will have more cards to play.
