BCCI pulled up over conflict of interest

There appears to have been a conflict of interest in N Srinivasan holding the office of BCCI treasurer while bidding for an IPL franchise, India's Supreme Court has observed, while suggesting that he resign his board position and retain his status as the owner of the Chennai Super Kings.

The court's observations - which included several stinging remarks - came while hearing a petition, filed by former BCCI president AC Muthiah, against the BCCI's constitution amendment that permitted Srinivasan to bid for the team in 2008. However, it reiterated through the course of the day-long hearing that these were observations and not a judgement.

Srinivasan, now the board secretary, is also vice-chairman and managing director of India Cements, the franchise owners.

"An amendment has been brought and there seems to be a conflict of interest. Can a person be a judge of his own case?" Justice Gyan Sudha Mishra asked the attorney-general, GE Vahanvati, who appeared for the BCCI. "I am hearing the matter relating to the controversy. But can I participate in the bidding of IPL teams tomorrow?

"You introduce an amendment where the IPL will be an exception. You are a prominent industrialist holding a key position in the board and have a stake in the bidding. In order to avoid suspicion and be above board, you should have got your membership suspended.

"Our nagging question is: can you continue in a dual capacity? That is the core issue. We are proceeding on the footing that you had a bar on any dual status before your blanket amendment was brought.

"We want to know what grave prejudice will be caused to you if we pass an order that you can either continue as the owner of the IPL team or contest the BCCI election," Justice Mishra said.

The court disagreed with the contention of Mukul Rohtagi, Srinivasan's senior counsel, that there was nothing wrong in his occupying both roles. "Then resign from BCCI and bid for the IPL," Justice Mishra said. "This can be equated with the office of profit. It is a crude explanation.

"We will give you a choice between the two, whether you want to continue in the BCCI or involve yourself with the IPL and India Cements."

The court dismissed Vahanvati's argument that Muthiah, as a former BCCI president, had no locus standi in challenging the amendment. The Bench, quoting BCCI rules, said it was under an obligation to inquire into any complaints made against its members.

"It is your duty to look into the complaint. Otherwise, why should Muthiah have to come to the court? One of your own rules says there should be no conflict of interest. The BCCI clause provides that in the event of any complaint of violation of rules, you should conduct an inquiry. Why did you not do it?", the Bench asked.

The BCCI's constitution was amended in 2008 to allow Srinivasan to buy the Chennai franchise. Before the amendment, clause 6.2.4 of the Regulations for Players, Team officials, Umpires and Administrators, read: "No administrator shall have, directly or indirectly, any commercial interest in the matches and events conducted by the board."

The amendment excluded Twenty20 cricket from the purview of the clause, which now reads: "No administrator shall have directly or indirectly any commercial interest in any of the events of the BCCI, excluding IPL, Champions League and Twenty20."

Muthiah's petition alleged that the amendment was made specifically to favour Srinivasan, and asserted that the decision to exclude IPL and Twenty20 tournaments was "illegal and opposed to public policy."

He appealed to the Supreme Court in April after the Madras high court refused to entertain his petition challenging the BCCI's decision to amend its constitution, saying there was "absolutely no merit to interfere". Muthiah had originally written to the BCCI to say that allowing India Cements to buy Chennai created a conflict of interest. When the board failed to respond to his complaint, Muthiah took his fight to the courts.