Charge left: 48 hours

September 15, 5 pm. That is the deadline for Deccan Chargers. If they fail to come clean by then, they will have a few more hours to know their fate. The all-powerful working committee of the BCCI will meet at 5:30 pm the same day and pass its verdict on the debt-ridden team. In all probability, the franchise might cease to exist and the board may go for an auction to have a new team.
However, the BCCI has tried every possible way to avoid the auction. According to a document circulated among its members, the board believes its best interest is in DC’s survival, not extinction.

“In financial terms, the loss and non-replacement of DC would cost the BCCI over Rs 100 crore in 2013 (loss of franchise fee and share of reduced TV rights). Each of the remaining franchises would lose a minimum of Rs 6 crore in 2013. Additionally, the BCCI is about to begin the second cycle of central sponsorships (2013-17) with Rs 180 crore per annum of revenue to be generated,” the secret note read.

That’s the reason why the BCCI decided to help DC wriggle out of its financial mess. As per the document, there were three options before the board:
1. Agree to be involved in the sale of franchise
2. Terminate the franchise agreement and stay with eight teams
3. Terminate the franchise agreement and immediately auction a new franchise

The board chose the first option and got involved in selling the team. Now that the banks, who have lent money to the DC management, rejected the only bid received on Thursday, the BCCI is left with no option. Its working committee, which had earlier issued a one-month notice to the team, is most likely to decide on terminating the contract on grounds of ‘breach of franchise agreement’.

The note says DC have not fulfilled their obligation to pay their players the instalment that was due on May 1, 2012. “Despite persistent chasing by IPL management and IMG and repeated promises from DC that the situation would be regularised, these debts remained unsettled,” the note read.

However, that was not the only problem. The board had discovered a bigger issue. And it was about mortgage. Says the note, “At the beginning of August, the BCCI became aware that the franchise owners had given a financial charge on the franchise without approval from the BCCI — to a financial institution. The BCCI also came to know that a number of other banks had let substantial funds to Deccan Chronicle Holding Limited and some of them had a charge on the receivables.”

This effectively means the team was mortgaged with banks — notably ICICI Bank, Yes Bank, IDFC and Kotak Mahindra Bank. It is, however, not known how much money was raised this way. But as the first measure, the board held back Rs 36 crore share from the IPL central revenue that was due to Chargers. The BCCI contended that it was not sure the amount would be used to pay off the players.

Now that the attempt to sell the team has been aborted — it is said the banks did not have enough trust on the lone bidder (PVP Ventures) — DC will have a Herculean task of clearing its players’ dues before the deadline. To save the team, they also have to produce papers from the banks, saying they won’t demand any ‘charge’, in the next 48 hours. Neck deep in debt, that could be a big ask. We will know on Saturday.