IPL: All you need to know about the controversy around CVC Capital’s ownership of Gujarat Titans

Indeed, due to the controversy around CVC Capital’s association with companies involved in the betting business, the BCCI had not handed the Letter of Intent (LoI) to the firm. The Sanjeev Goenka-led RPSG Group which had bought the Lucknow IPL team, was given the LoI immediately.

Deeper scrutiny

While BCCI officials have said that CVC was cleared after legal scrutiny, the board carried out another round of scrutiny into CVC’s investment.

“Owing to concerns surrounding the business interests of CVC Capital, more particularly its investments in Malta-headquartered betting operator Tipico and UK’s Sky Betting and Gaming, the BCCI had constituted an independent external panel headed by retired Supreme Court Judge Justice K.S. Radhakrishnan to submit a report on granting clearance to CVC to participate in the bidding process,” Soham Banerjee, an Associate at Pioneer Legal, a law firm, told Moneycontrol.

He added: “It appears that the clearance granted to CVC Capital was premised on the report submitted by the independent external panel constituted by the BCCI.”

Banerjee noted that from the due diligence conducted by the BCCI, it had reportedly come to light that investments in betting firms were made by CVC’s European Fund.

“CVC had bid for the Ahmedabad franchise through its Asian fund, which had not invested in any businesses that were considered to be illegal under Indian law. Since private firms such as CVC invest in various entities, the lack of a direct nexus between the Asian fund of CVC and its investment in any business considered to be illegal under Indian law appears to have ultimately worked in CVC’s favour,” he added.

Neerav Merchant, Partner, Majmudar & Partners, a law firm opined that the CVC Capital Partners controversy should be viewed broadly as they are the only investors in a company which provides a platform for gambling which is different from match fixing.

"In my opinion, unless CVC’s active role is identified in manipulating the numbers in these gambling companies, they can be segregated. If such segregation is not made, several lead IPL sponsors like Dream 11 (where several players are brand ambassadors) and My 11 (where Sourav Ganguly is the brand ambassador) may also be scrutinized as even they provide a platform for gambling, although it is passed by benefitting from the loophole of calling it a skill based application,” he said.

BCCI approval

Banerjee said that based on the recommendations in the report, the BCCI has reportedly given the green signal to CVC’s participation in the IPL. “It would appear therefore that the mandate of the panel headed by Justice Radhakrishnan was to the limited extent of scrutinising the legal infirmities, if any, in granting clearance to CVC and BCCI had the discretion to adopt the report of the panel while deciding on the same, which it reportedly did."

CVC Capital getting the go ahead from the BCCI comes ahead of the mega player auction scheduled to take place on February 12 and 13 in Bengaluru.