Shares of India Cements shot 17 percent intraday on Thursday as it has approved proposal for reorganisation of its IPL cricket team Chennai Super Kings. BCCI President-in-exile N Srinivasan led India Cements' board approved transfer of IPL team CSK to a wholly-owned subsidiary Chennai Super Kings Cricket.
A decision to this effect was taken at a Board meeting of the company held in Chennai. "...pursuant to the decision of Board of Directors of India Cements, the company transferred the IPL franchise rights to its wholly-owned subsidiary Chennai Super Kings Cricket," Srinivasan said.
He further said, "The Board considered a proposal for reorganisation of Chennai Super Kings Cricket under which ownership of the franchise will be issued to the shareholders of India Cements, subject to necessary approvals."
Srinivasan, who has been barred by the Supreme Court from contesting any polls of the board till he gave up ownership of the IPL team, did not specify who would be at the helm of Chennai Super Kings Cricket Ltd and details of its main functionaries.
"This is the first step in slowly getting into a fully cement focussed company," he said, declining to comment on how the new subsidiary would be capitalised.
He also refused to comment on anything related to Court orders or to BCCI on the issue.Last week, the company had informed BSE that it would transfer its IPL team CSK to the new subsidiary, Chennai Super Kings Cricket Ltd (CSKC). The company has already completed the required documentation for the transfer and its meeting today was called to consider reorganisation proposals relating to the subsidiary, CSKC.
Earlier on September 26, 2014, the Board of Directors of the company had approved the proposal to demerge Chennai Super Kings (CSK) into a wholly-owned subsidiary of the company, by transferring its net assets at cost. It had stated that the effective date of transfer will be January 1, 2015.
Last month, a Supreme Court bench of Justice T S Thakur and Justice F M I Khalifulla had assailed the amendment in BCCI rules permitting cricket administrators like Srinivasan to have commercial interest by owing teams in IPL and Champions League and said it was bad on grounds of conflict of interest.
The apex court directed that BCCI elections be held in six weeks "subject to the condition that no one who has any commercial interest in the BCCI events (including N Srinivasan) shall be eligible for contesting the elections for any post whatsoever".
The rider in the judgement would make it probably difficult for Srinivasan to become the BCCI President, unless he quickly relinquished his interest in the CSK.
Meanwhile, India Cements reported a net loss of Rs 11.68 crore for the third quarter ended December 31, 2014. The Chennai-based company had reported a net profit of Rs 42 lakh during the same period last year. Total income from operations for the October-December 2014 period grew to Rs 1,040.22 crore, from Rs 1,037.64 crore registered a year earlier.
At 12:22 hrs India Cements was quoting at Rs 108.25, up Rs 13.25, or 13.95 percent on the BSE.
(With inputs from PTI)
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