Tanuj is an MBA by qualification and currently works at a hedge fund in Singapore. Prior to this he was a banker in India. Tanuj has written guest columns for finance journals like CNBC, The Asset, The Hedge Fund Journal, Institutional Investor, Risk.net etc. in the past and was also a regular columnist with The Wall Street Journal. He can be followed on Twitter @Tanuj_Khosla. Alternatively he can be reached at firstname.lastname@example.org.
Time for Srinivasan and Srikkanth to make a choice
Posted on: 09:25 AM IST Feb 09, 2012 IST
As an analyst at a hedge fund, there are two basic things I look for while evaluating a company: its track record of corporate governance and any potential conflict of interest for the top management.
For example, I personally don't like companies in which the CEO is also the chairman of the board of directors. This is because the job of the board of directors is to ensure that the top management acts in the best interests of the stakeholders of the company. In order to do this job properly, the board members need two things - independence and relevant expertise. A CEO who is also the chairman might have the latter but is clearly not independent. What may be good for him may not be in the best interests of other stakeholders. Unfortunately N Srinivasan, who himself heads a publically listed company (India Cements) as its managing director, doesn't seem to think so and currently occupies the posts of BCCI president, Tamil Nadu Cricket Association president, and owner of the IPL franchise Chennai Super Kings.
This is a clear conflict of interest if ever there was one. It is like Mukesh Ambani heading the Ministry of Petroleum & Natural Gas and being the chairman of Reliance Industries at the same time. It doesn't take a rocket scientist to figure out that this is not right, but nothing changes because the BCCI - being an autonomous body - is not accountable to anybody. Not the government, the people or the capital markets.
Currently, the BCCI finds itself in a spot where Sahara, the sponsors of the Indian team and owners of the IPL franchise Pune Warriors India, have decided to pull out of its association with the BCCI. Prior to that, the BCCI had scrapped the contract with its broadcast rights holder Nimbus three years before expiry. Before that, the BCCI had terminated the Kochi Tuskers Kerala IPL franchise for breaching the terms of agreement.
It is also locked in a fight with the Sports Ministry over the National Sports Bill that seeks to regulate the functioning of BCCI. The proposed bill wants to give the BCCI the status of a National Sports Federation (NSF) and therefore bring it under the purview of the RTI Act. This logjam is despite the Sports Minister Ajay Maken claiming that there is not a single clause in the bill which encroaches upon the powers of NSFs.
Former India skipper Sunil Gavaskar has alleged that the BCCI made a 'U-turn' on his contract and is now refusing to pay him his dues for media and governing council related activities involving the IPL. Further, the BCCI is involved in arbitration with the Rajasthan Royals and King's XI Punjab, IPL franchises it banned for IPL 4 last year citing violation of franchise agreements. The teams were later reinstated by the Bombay High Court.
Mind you, these are all off-field issues. I am not even going into the pathetic performance of the Indian cricket team in England and Australia, which clearly shows the lack of proper planning (things like scheduling of more practice games, preparing bouncy tracks at home etc.) by the BCCI. The senior players like Dravid and Laxman shall be made the scapegoats after the tour while the BCCI selectors will continue to go about life in their merry way.
However to be fair to BCCI, there does seem to be some merit in its stand against Nimbus and Kochi, although the public would need some more hard facts in order to make informed judgements about the same.
Coming back to the issue of a conflict of interest, Srinivasan isn't the only one in the BCCI who is guilty of it. Former India opener Kris Srikkanth, who is the current BCCI selection committee chairman, is also the brand ambassador of who else but Srinivasan's Chennai Super Kings.
So how does this conflict of interest manifest itself for Srikkanth? For starters, Murali Vijay, in my humble opinion, was given a longer rope in the Indian team than others like say Saurabh Tiwary and Shikhar Dhawan despite his lacklustre performances with the willow. His replacement in the Test team for the England tour last year was a fellow Tamil Nadu and Chennai player, Abhinav Mukund. Although Mukund is a good batsman and gave a decent account of himself in challenging conditions of England, there are others like Aakash Chopra and Wasim Jaffer who in my opinion deserved a shot ahead of him. It is appalling when in such a scenario the BCCI blows its trumpet about being out of "Lalit Modi's shadow".
Let me clarify, Modi is no saint himself. There is considerable lack of clarity about his credentials and background. These days he seems to be in a 'tell all' mood in order to keep himself relevant and fresh in the minds of the average Indian cricket fan, but I can bet that somewhere deep down he would be regretting the day he crossed paths with Shashi Tharoor over the Kochi franchise. Tharoor lost his ministership, Modi his IPL chairmanship (and has had to camp abroad since) and ironically the Kochi team which was the bone of contention between the two has also been terminated by the BCCI (I can mentally imagine Srinivasan smiling internally at the turn of events).
No intelligent person would be fooled even for a minute by Modi's attempt to project himself as a martyr who was trying to protect the IPL. His role in scuttling the Indian Cricket League and rigging of the IPL auctions, revealed by his own admission of the same, gives a slight glimpse into the wrongdoings he committed during his time in the chair.
In conclusion, the Indian team is struggling badly on the field and the cricket board even worse off it. It is high time that both the 'Sris' - Srikkanth and Srinivasan who are in charge of on-field and off-field performances respectively - eliminate the conflict of interest by choosing one post and become more accountable.
The above thought seems to be naïve to me even as I write it but I don't know what else can an Indian cricket fan do except hope that things change. The BCCI is a private autonomous body run by wealthy business and politicians and administrators who seem to have their vested interests at heart. Maybe some of them can take a leaf out of Anil Kumble's book, who recently resigned from National Cricket Academy (NCA) on allegations about a conflict of interest due to him being director of a player management firm named Tenvic and chief mentor for Royal Challengers Bangalore. That is an example of a gentleman who has set a moral benchmark with his action.
Sadly, Srikkanth, Srinivasan, Modi and others running the BCCI aren't Kumbles.