Many in this country including the corporates are closely watching the IPL controversy and it had led Mr.Shari Tharoor to submit his resignation. There are many interesting issues in the entire episode and I want to highlight few issues as a classic example of complications in dealing with corporate issues.
Any irregularity in a company may be dealwith by the Central Government, Company Law Board,
The issue has come to lime light as everybody knows with the tweeting done by Mr.Lalit Modi saying that Mr.Shashi Tharoor had called him asking not to insist as to who are all the shareholders of the Kochi Franchise. Initially, the people behind Kochi Franchise had made a public statement that they have acted in accordance with the provisions of the Companies Act, 1956 and the corporate regulations. Then, slowly, the media has even probed into the issue of violation of the provisions of the Companies Act, 1956 in granting sweat equity to Shunanda Pushkar.
The facts are like:
1. Rendezvous Sports World Pvt Ltd is a private limited company and it has granted 70 crore worth equity to Shunanda Pushkar claiming that she has a professional expertise and an expertise in event management and brand management.
2. Rendezvous Sports World Pvt. Ltd has infact changed its name and the company has brought the other investors together to form a consortium for bidding for IPL Kochi Franchise.
3. It was pointed by the media that Rendezvous Sports has violated all the provisions of the Companies Act, 1956 in granting Sweat Equity to Shunanda Pushkar and now Shunanda Pushkar had voluntarily surrendered her share claiming that she is deeply hurt.
4. BCCI claims that there is a clause in the bidding document that no information is to be revealed public and they claim it as a "confidentiality clause".
5. No shareholder in the Company nor the other investors has any grievance against the management in the Company.
6. The Central Government has decided to look into the issue in public interest and in view of the wide spread allegations and it was told that while the Finance Ministry will look into the issue of sources of funds, Corporate Ministry will look into other issues like non-compliance of corporate regulations etc.
There are many complications in the issue and those are like:
How to deal with the issue of "professional expertise"
How to look into the affairs of other investors while the Rendezvous Sports is dealwith by the authority
The presence of political and other pressures and heavy weights involved in the issue And, plethora of technical issues
The validity of confidentiality clause
The authority of BCCI
The authority of the adjudicating forum to question the BCCI and look into the BCCI affairs
The legal status of IPL and its constitution etc.
This is a classic example of complications in a corporate dispute or a matter. Assuming that a matter like this comes before the Company Law Board or the
Note: the intention is focus on the complications in dealing with a corporate dispute and nothing more.