How does IPL fiasco remind of Satyam fraud scam?
Wednesday, 28 April 2010, 10:15 Hrs
Till two new teams (Kochi and Pune) were not announced, IPL was seen as a money-spinner and a thriller for cricket fans and owners, but now it has been drawing attention for all the wrong reasons. If we think of similarities with India's biggest corporate fraud, the Satyam scandal, we find that in both the case that what were the authorities supposed to monitor the transparency in financial dealings doing.
Rediff has put down some of the points which shows the similarities between these two case. Those are:-
1. The main players
In both the cases, the chieftains are main accused - Lalit Modi heading IPL and B Ramalinga Raju lording over Satyam. Raju scripted a rosy picture of soaring profits, brand value, revenues and much more. Modi too created a tremendous brand seemingly out of nothing, but it now transpires that there is a whole lot more to it than meets the eye.
In both the cases, it was a simple error that led to their fall. Raju's scam would have never come to light had he not tried to push through the Maytas deal. His trouble began when Maytas shareholders opposed his proposal to take over the company. Modi is at the centre of a storm after he attacked former minister for external affairs Shashi Tharoor over the issue of stakeholders in the Kochi franchise, which is one of the two new teams that will make IPL debut next year.
2. The charges
Ramalinga Raju admitted to orchestrating a 7,800 crore scandal by cooking up the account books. Modi is accused of indulging in betting and money laundering, not disclosing shareholding patterns, tarnishing the image of the IPL.
3. Role of auditors
In many financial scandals, just like the Satyam incident, auditors are mere rubber stamps. In the case of IPL, the BCCI or its auditors never checked the shareholding patterns or the flow of unaccounted for money. The ICAI has now asked for financial statements from IPL franchises to study the details.
4. Rest of the team?
Why blame only one person? Could Modi alone have managed the show by himself? Are not the IPL governing council members answerable too, just like Satyam's independent directors?
6. Political friends
The political connection makes all the difference. While Raju had political backing from the state, Modi too has strong political support.
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