The London-based businessman, Kundra, bought about 12% shares of the Rajasthan Royals at a whopping $15 million.
Moments after the Board of Control for Cricket in India announced termination of Rajasthan Royals and Kings XI Punjab, Raj Kundra came on record saying the Royals will explore legal options.
More than 24 hours after the decision, the Royals management decided to adopt a much more conciliatory approach towards the BCCI hoping for arbitration but Kundra’s anger, anguish and even frustration was understandable.
It now emerges that financially, Kundra may have suffered the most among the IPL owners of either team. The London-based businessman bought about 12% shares of the Rajasthan Royals at a whopping $15 million.
Converted into Indian rupee, he had invested about Rs80 crore in the Royals in 2009.
The shares were calculated at more than 200% of the price for which the Royals management had bought the team in 2008.
Kundra and his wife Shilpa Shetty bought the shares at team’s calculated brand value $140 million while the team itself was purchased for $67 million. Even that $67 million is paid to the BCCI in 10 instalments over 10 years by the original owners. The brand value of the Royals, as also of other teams, has surely gone up.
But it is believed that each partner of the two teams may have invested somewhere between Rs20 and 25 crore in the last three years. If reports of $70 million compensation package to each team is to be believed, then none of the owners would suffer any financial loss. It’s a different matter that the owners would rather suffer losses than lose the teams.
“It’s not about only money. We’re accountable to our fans and sponsors. We cannot accept this,” said one Royals official. He agreed that Raj Kundra lost out hugely in the bargain but said the Royals will fight the termination together. “Yes, Raj made a huge investment but the loss is not his alone. We’ll fight it out,” the official added.
It is learnt that the Royals are in no hurry to go to the court. At this stage, they look to explore the option of arbitration. “We will seek an audience from the BCCI first. Our contract is terminated without notice. So we will explore all possible conciliatory options before going to the court,” he said.
The Kings XI Punjab are expected to make a statement on Wednesday.
Meanwhile, there has been a stoic silence from other team owners. Only Vijay Mallya chose to express solidarity with the Royals and Kings XI but the owners of Mumbai, Delhi and Hyderabad teams have chosen to stay quiet. Shah Rukh Khan of Kolkata Knight Riders is yet to make a comment on his Twitter page.
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