Chennai/Mumbai,March 7: The overweening ambition of Mr Lalit Modi to further ratchet up the astronomical valuations of the Indian Premier League resulted in a hasty retreat on Sunday, without the sealed tenders even being opened. Mr Modi announced cancellation of the auction for two new franchises and relaxed key conditions for fresh bids on March 21 as dark games of subterfuge surfaced.

Cricket board president Shashank Manohar and BCCI secretary N. Srinivasan put their foot down at the last minute. They were not informed of the three preconditions — that the bidder should have a $1 billion (Rs 4,578 crores) net worth, submit a $100 million (Rs 478 crores) bank guarantee with the bid and a 100 per cent bank guarantee for the successful bid amount.
Mr Manohar told Mr Modi: “I am flabbergasted. You did not even take me into confidence.” He even hinted to Mr Modi that he felt the auction was being fixed.
The BCCI and IPL have not always seen eye to eye and the undercurrents came to a boil at the Sunday auction, with the board bigwigs asserting their authority over the league that is played under their auspices but run by Mr Modi in his flamboyant style.
When he heard about the $1 billion net worth clause, actor Shah Rukh Khan, owner of Kolkata Knight Riders, tweeted Mr Modi: “1 billion... u r nuts my friend... completely absolutely mad and wonderful.”
There were only three bidders — the Adani group, the Dhoots of Videocon and Jaypee — who were thought to have met the conditions. Videocon even claimed that it bid for $300 million.
“We are disappointed. We had complied with all the formalities, yet we were not given any reason for the cancellation. This is not something to fight over. We don’t want to hurt the sentiments of cricket lovers. The BCCI’s order is final and we will obey them. We will once again bid and be present for the bidding process in Chennai,” said Videocon Group chairman Venugopal Dhoor, who bid for the Pune franchise. The company has roped in actors Kareena Kapoor and Saif Ali Khan.
Bidders contended that the economics of the Modi formula wouldn’t work for the newcomers as the conditions are set. With existing franchises taking away sponsors and about 80 companies signing deals directly with IPL, what is left for the newcomers, they asked.
In the main, the IPL governing council removed the $1 billion net worth clause. This newspaper had pointed out that only someone like Mr Mukesh Ambani of Reliance Industries could qualify at those stratospheric levels as the cash turnover would have to be $2.1 billion (Rs 10,000 crores).
The IPL hacked the $100 million (Rs 458 crores) bank guarantee to $10 million (Rs 45.8 crores). This is to be submitted a day before the auction. “It was $5 million at the first tender (in 2008) but the valuation has gone up now,” Mr Modi said in Mumbai.
The 100 per cent bank guarantee demanded from successful bidders has been reduced to a 10 per cent rolling bank guarantee. This is to be paid within 48 hours of the successful bid, which is on par with the first tendering process.
Only the base price of $225 million remains unchanged. The existing tenders were not opened at the IPL governing council meeting in Mumbai and were returned to the bidders.
“The relaxation of the clauses was done because we received letters from many, many companies who had expressed interest but said that the $1 billion net worth criteria was not asked of the existing franchisees,” Mr Modi said.

Age Correspondents