The owners of the Rajasthan Royals are close to selling the majority of the IPL franchise to a Kolkata-based businessman for $200 million, ESPNcricinfo has learned. However, the deal still requires the approval of the BCCI. Should it go through, it would be the first sale of an IPL franchise in the league's five-year history.
Mannoj Jain, the founder and promoter of the Jain Group of Industries, has offered to buy 88.3% stake from three of the four shareholders in the franchise - Tresco International (Suresh Chellaram and family), which owns a 44.2% stake, Emerging Media (Manoj Badale), which owns 32.4% and Blue Water Estate Ltd (Lachlan Murdoch), the eldest son of Rupert Murdoch, which owns 11.7% - according to a person familiar with the developments.
The deal values the Royals at $226.50 million, almost three-and-a-half times more than the $67 million the owners paid for the franchise at the original auction in 2008. Raj Kundra and Shilpa Shetty, who bought an 11.7% stake for $15.4 million in 2009, will retain their share in the franchise. The deal with Jain raises the value of their holdings to $26.50 million, an increase of 72% over a three-year period. News of the deal was first reported by the Economic Times on March 20.
Jain told Times of India on Wednesday that his group wants to buy the franchise but are waiting on the board to evaluate the proposal. "The franchise-owners are willing to sell their stake and are currently in talks with the BCCI," he said. "Everything now depends on the BCCI."
A top board official said that the BCCI was reluctant to give consent to the deal because there is a strong opinion that Lalit Modi, the former IPL commissioner who was suspended by the BCCI for alleged irregularities during his tenure, might financially benefit from the sale. This is due to unsubstantiated allegations in the past around the possibility that Modi may have hidden stakes in the Royals' ownership. "We suspect if the deal is allowed to go through Modi can benefit financially and some in the BCCI at least do not want that to happen," the official told ESPNcricinfo.
When contacted, the management of the franchise said they were not aware of a deal and were focused on getting ready for the IPL season that begins on April 4.
According to the Jain group's website, Jain has businesses in infrastructure, steel, power and real estate. The company made a profit of Rs 694.26 million after tax for the year ended 2009-10. Among their projects is the Kolkata Sports City, a sports township set on 250 acres in Rajarhat.
The Royals have had something of a chequered history in the IPL. Led by Shane Warne, the team won the inaugural tournament in 2008, surprising many in the process. Two years later the BCCI abruptly terminated the franchise from the league, along with the Kings XI Punjab, on charges of transgressing shareholding and ownership norms that threatened to "shake the very foundation of the tender process". However, the Royals fought their expulsion in the Bombay High Court and won, with the court ordering they be restored to the league with all their rights and privileges intact. The court also referred the case to arbitration, the proceedings of which are still on.