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India rocked by cricket scandal

An Indian government minister is forced to resign over a friend’s stake in a club in the Indian Premier League, and a financial investigation of the funding of the nation’s top cricket teams will be launched.

April 19, 2010|By Mark Magnier, Los Angeles Times

Reporting from New Delhi — Combine two of India's favorite pastimes, cricket and politics. Add allegations of corruption, greed, and tax evasion. Throw in the implosion of a highflying political career and it's not difficult to understand why India's hyperactive broadcast media are on a tear.

On Monday, India's finance minister announced an investigation of the funding and sources behind the nation's top cricket teams, suggesting that more bombshells are to come. The scandal underscores the cost of operating a business on steroids without creating adequate safeguards, analysts said.

At issue is the questionable allocation of shares in the enormously popular Indian Premier League, which in its three-year life has become a virtual license to print money, with its "brand value" doubling to $4 billion in the last year.

Cricket has long been popular here, but the Premier League organized truncated "Twenty20" matches among Indian teams, where before, they mostly involved longer matches against foreign teams. So when word spread that the eight-team league would expand into Pune, in Maharashtra state, and Cochin, in Kerala state, it was huge news.

The political opposition soon cried foul, however, on discovering that a female friend of Shashi Tharoor, the junior foreign minister, had received $15 million in "sweat equity" shares as part of the Kerala deal, though it's not clear how much work she undertook. This, the opposition charged, was a backdoor way to secure his help in assembling the deal.

Tharoor, a former undersecretary at the United Nations and author of several fiction and nonfiction books before entering politics, is from Kerala. His friend, real estate executive Sunanda Pushkar, is rumored to be his future bride.

Tharoor and Pushkar have denied any conflict of interest. And Pushkar on Sunday offered to return the shares.

That wasn't enough, however. After a series of hurried meetings with ruling Congress party heavyweights and the prime minister, Tharoor resigned late Sunday evening.

Tharoor, 54, is hardly a stranger to controversy. Last year he spent weeks at a five-star hotel while awaiting renovations on his official residence. Although he said he'd pay for it himself, the incident was not well received during a party austerity drive. He openly challenged superiors in Twitter messages, winning plaudits with the under-30 crowd but rattling the political establishment.

For many, the questionable cricket link was the final straw.

"Whether he has a political career left, we'll have to see, but I doubt it," said Mahesh Rangarajan, a professor at Delhi University.

With Tharoor's exit, the spotlight shifted Monday to the league and other teams' ownership, with opposition lawmakers howling that the league was little more than a "betting and gambling ring."

Behind the league's success is its chairman, business scion Lalit Modi, 46, who's been termed everything from a dictator and black sheep for his arrogant style and a visionary for creating the league from scratch, reportedly modeled on soccer's English Premier League.

Local news reports suggested Monday that Modi could lose his chairmanship in the deepening scandal.

Of particular interest to tax authorities are charges that some owners used their stakes to launder money.

"This could lead to a very serious investigation in today's security environment," Rangarajan said.

So far, the charges are unproved, but the scandal has raised concerns that Indian businesses, in their headlong rush forward, are falling short on financial disclosure, with some analysts pointing to the 2009 meltdown of Satyam, once a world-class information technology outsourcing company found to be cooking the books.

The NBA and the NFL have had decades to absorb the impact of big-money culture, but the Indian league has developed in just three years.

"In India, you've never seen the monetization of sport like this," said Ayaz Memon, a cricket commentator. "It's a culture shock."

There's too much money, too many fashion shows at the end of cricket matches, purists argue, detracting from the essence of the game.

Cricket has been overdue for reform, sports historian Boria Majumdar said.

"Cricket is our only secular religion," he said. "Everyone understands the need for a serious cleansing. Big money, big corporations, unclean money, shady deals, they're everywhere."

mark.magnier@latimes.com

Anshul Rana in The Times' New Delhi Bureau contributed to this report.

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