Royals under gaze for foreign funds

IPL fiasco: Shashank Manohar, Arun Jaitley, Rajiv Shukla tipped for top posts

Preliminary investigations into the accounts of the Mumbai-based M/s Jaipur IPL Cricket Private Limited (JIPL) that won the bidding for the Jaipur franchise have given rise to suspicions of “probable” use of unaccounted foreign funds, sources close to the I-T team involved in the investigation told Deccan Herald. The bidding for the franchise was settled for US$67 million in 2008.

The franchise floated the Rajasthan Royals team, a major chunk of which is owned by Shilpa Shetty and Raj Kundra, Aditya Chellaram and Suresh Chellaram.

The main reason behind the suspicion about involvement of unaccounted foreign funds in the bidding by the JIPL is that after winning the bidding, the company had been persistently seeking the FDI route to bring foreign funds, according to sources. After depositing the required bidding amount through internal arrangement, the JIPL has been seeking the FDI route to raise funds to cover up the “possible unaccounted foreign fund”, the sources said.

It is learnt that the JIPL had approached the Foreign Investment Promotion Board (FIPB) — the inter-governmental body that gives approval to FDI proposals other than the ones allowed through the automatic route — for raising overseas funds through induction of 100 per cent foreign equity by way of issue of shares.

But the FIPB rejected the JIPL proposal without assigning any reasons. Subsequently, the JIPL again approached the FIPB for approval of its proposed FDI induction.

The Directorate General of Investigation of the Mumbai zone of the Income Tax Department has also been alerted to look into “probable” involvement of unaccounted foreign funds by the JIPL during the bidding of the Jaipur franchise of the IPL, the sources said.

As part of investigation into the unaccounted foreign funds by the JIPL for winning the bidding for the Jaipur franchise, the I-T sleuths are also looking into probable use of foreign funds by Shilpa Shetty and her husband for buying shares in the Rajasthan Royals, the sources said.

Incidentally, the JIPL had submitted its application afresh to the FIPB for raising funds through FDI route much before the Shashi Tharoor got entangled in the Kochi franchise row.