The India Cements board has decided to vest the ownership of its Indian Premier League franchise, Chennai Super Kings (CSK), in a wholly-owned subsidiary.
Reading out the board’s decision to mediapersons, N Srinivasan, Vice-Chairman and Managing, India Cements, said: “Pursuant to the decision of the board of directors of India Cements, the IPL franchise is transferred to its wholly-owned subsidiary, Chennai Super Kings Cricket Ltd.” The subsidiary will be owned by India Cements shareholders on a proportionate basis.
According to information available on the BSE, over 70 per cent of the shares in India Cements is with the public while the promoters and promoter group hold 28 per cent. Of this, Srinivasan holds a 0.14 per cent stake while the rest is with holding companies and others.
Proportional ownership
The board considered “a proposal for reorganisation of CSK Cricket Ltd under which the ownership will go to the shareholders of India Cements” subject to statutory approvals. The ownership will be in proportion to shareholders’ stakes in India Cements, he said.
The decision is significant in the light of the Supreme Court’s ruling last month on the IPL 2013 betting and match-fixing case, in which it saw a conflict of interest in officials of cricket regulator Board of Control for Cricket in India owning a franchise.
Srinivasan had to step aside as BCCI president during the litigation and investigations. The court shot down the BCCI rule that allows its officials to own an IPL franchise, saying that they would have to choose between one of the two. This was a precondition to holding the BCCI Board election in March.
The probe found Srinivasan’s son-in-law, Gurunath Meiyappan, and Rajasthan Royals co-owner, Raj Kundra, guilty of betting.
At the press conference on Wednesday, Srinivasan declined to comment on the BCCI issue or how the reorganisation of CSK complies with the Supreme Court’s ruling. The board of the company can only deal with India Cements related issues and its third-quarter performance, he said.
Broad-basing the ownership of CSK is significant as this is the first time an IPL franchise will be widely held, he said. Ownership will be on a proportionate basis relative to shareholders’ stakes in India Cements, he added.