Speaking to CNN-IBN, the former IPL boss warns that there is black money in the IPL.
Lalit Modi, the former Indian Premier League chairman, spoke to CNN-IBN Editor-in-Chief Rajdeep Sardesai on matters of underhand dealings in the lucrative Twenty20 tournament. Read the transcript below.
Rajdeep Sardesai: Appreciate your joining us Mr Modi. There are those - your critics in particular - who say the ills of the IPL are a legacy inherited because of the manner in which the IPL was structured when you were in charge. Financial dealings were not transparent; they were opaque. The funding of teams was not transparent, and that's why we are having the kind of problems that we're seeing today, particularly in terms of black-money transactions.
Lalit Modi: It's [pointing at me] quite normal with the BCCI. They point everything back to me, but I was very clear when we set up the IPL. As far as the financial structures were concerned, it was quite opaque, very opaque in fact. All the dealings with the players was totally above board. We had incidents where player issues did arise with the junior players, especially with the India A team, if you remember very clearly. There was horse trading going on, and we put an end to that by going through a draft system and making sure that everybody gets the same price. It's a serious issue without any doubt because all teams, of course, want the best players. But at the same time, you want to make it an even playing field, and at the top of that, we had a cap and we wanted everybody to adhere to the cap. When I was there for the first few years, I don't think there was anything like that at all.
RS: Are you saying that the Rs. 30-lakh-rupee cap, which you had when you were in charge, was not being violated, that there were no negotiations going on, that there weren't attempts to lure players even while you were in charge? Isn't it true that this is legacy you bequeathed with that Rs. 30-lakh cap? Why should a young player, who has not played for India, be paid only Rs. 30 lakh when others are paid in crores?
LM: As far as the system is concerned, you are absolutely right. They should all have gone into the pool, but at that point in time, the India A team had just won - if you remember - in Malaysia, all the teams had just come into being, the main auction had finished and we had allowed the young players to go back into the IPL and everybody was trying to horse-trade. To put an end to that, we had put a cap. And yes, there was no horse trading at that point in time because we had put a cap to it and we put a stop to it. And it wasn't Rs. 30 lakh, it was Rs. 25 lakh. We said that everybody will get a fixed price at Rs. 25 lakh. The players were taken for a three-year period, and I was only there for three years. So I can't point out after that what happened.
RS: But you are admitting, Mr Modi, that it was a mistake - every player should have gone in the auction and that the cap rule, as it has turned out, encouraged corruption, encouraged black-money transactions.
LM: Looking back in hindsight, yes. As I sit here today, you’ve got to understand that when we set up the league, it was in 2008, very early. We were trying it out and we did the system for three years. At that point in time, there was no black money in the system, but I do understand today, yes, players are being negotiated outside the system and contracts are being done with the players which say one thing and but are being paid another thing. And that's quite prevalent all the way through all the teams and it is happening as we speak right now. It not only applies to the Indian players but applies to a lot of international players too.
RS: But, Mr Modi, you are admitting on this program that there are these negotiations which are taking place parallel. What is also being brought under the scanner is the fact that while the players appear to be the soft target, the franchises get away. When you were the IPL boss, Ravindra Jadeja was suspended you had a situation where Manish Pandey action was taken.
These [TP Sudhindra, Shalabh Srivastava, Mohnish Mishra, Arjun Yadav, Abhinav Bali] were players who were negotiating as they were in a sting operation. They have been suspended, but what about the franchise owners. What action has ever been taken against a franchise owner?
LM: There's a catch-22 situation, Rajdeep, at the end of the day. The issue had become very clearly that all team owners will want the best players and they will like to negotiate the best deals that they can with the player concerned. It is for the governing council and the management to ensure a level playing field and ensure that nobody does that. That's why we suspended Ravindra Jadeja and that's why the Manish Pandey action was taken at that point in time. I don't know whether the same is being done today or not being done today.
RS: But you took no action against the franchise owners …
LM: No, we didn't take action against the franchise owners, we took action against the players. Yes, there has to be a system that has to be brought into place where the franchises don't break this rule. But it is human psychology that they will want the best players and they will try and negotiate with the best players. To avoid that, it's better to put them through a draft system. And if you put them through a draft system, which we had in first place, this issue would not have arisen today again.
RS: But would you concede that franchises need to be under the scanner? It can't just be the players all the time. Suspending players is one thing. Abroad, in the Italian football league, Juventus were removed from the league because there was corruption found. In Scotland we have seen that with Rangers in football. Why doesn't that happen in India? Is it because the IPL is a cozy club with lots of powerful people?
LM: Rajdeep, I think we are again losing the issue. The issue is very clearly that franchises, as I said, will want the best team. If they want the best team, they have the right to negotiate. But it's the rules. If the rules allow them to negotiate, then, of course, they are going to negotiate ... Why ambiguity in the first place? We never had that ambiguity in the first place in the first three years. Why that ambiguity is coming now? Because the rules have changed. The rules shouldn't change. I mean, we have certain rules which allow everybody to go in a certain system and that's the system they should be going towards.
RS: But Mr Modi, let me give you a concrete example, that of Chris Gayle, which is now being given. Chris Gayle, for example, comes halfway into the Royal Challengers Bangalore because one player gets injured. We don't know how much Chris Gayle has been paid. Surely, all this should be made public otherwise the fear will be that a lot of cash is being paid which is not being declared or there is some other kind of transaction going on.
LM: In regard to Chris Gayle, you ask me to bat with a straight bat and I am going to bat with a straight bat. Yes, I've heard the same rumours and I've heard discontent_cn between a few team owners in regards to that he is being allowed to continue and that he has been able to negotiate his contract outside the system. I don't have facts about that, so I can't comment about that. Only that I have heard the same story as you have.