Court asks Manohar to explain $5m fund

MUMBAI: The onus is on Shashank Manohar, the former president of the Board of Control for Cricket in India (BCCI), to prove he had no role in the transfer of $5 million into a bank account in South Africa during Indian Premier League 2, the Enforcement Directorate told the Bombay High Court on Wednesday.

A division bench of Chief Justice Mohit Shah and Justice MS Sanklecha heard Manohar's petition challenging the November 25, 2011, showcause notice under the Foreign Exchange Management Act as well as the June 6, 2012, notice asking him to participate in adjudication proceedings. ED alleged that foreign exchange was transferred into an account of IPL SA Private Limited and Reserve Bank of India's permission was not taken for it.

Manohar's senior counsel Raju Subramaniam argued that Manohar "is sought to be arraigned when he was never in charge of day to day management of the company." He said IPL constituted a separate committee and its chairman Lalit Modi was taking decisions, "As former president, the petitioner was ex-officio member but not a member and not in charge of day to day matters regarding IPL," he added. Subramaniam said BCCI had not opened the account in SA. Also Manohar had only advised IPL's governing council to obtain RBI permission before opening an account and had nothing to do with its operation. He said Manohar is willing to go for a personal hearing but not for adjudication proceedings which are quasi-judicial in nature.

Additional solicitor general Kevic Setalvad and advocate Som Sinha submitted that the ED's complaint demonstrates that Manohar was in "exclusive control" and in charge of taking decisions including shifting venue, opening of the bank account and negotiating with franchisees. "Every breach under FEMA stands admitted. Funds were transferred from State Bank of Travancore from Jaipur. It is not repatriated. They brazenly transmitted money. Where is this money gone? Huge sums of money were transferred out of the country. Today there is a loss of foreign exchange in respect of a third party we don't know," said Setalvad.

To the judges query whether ED can give Manohar a fresh hearing, Setalvad replied that the findings are at a preliminary stage and no final decision has been taken. He said Manohar has to satisfy ED that he was not involved.

The judges have reserved their verdict.

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Shweta Pandey

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