ED steps in to probe all IPL foreign transactions

Last year,the Income Tax codenamed its probe into the Indian Premier League and its Commissioner Lalit Modi as Operation Second Inning.

Last year,the Income Tax codenamed its probe into the Indian Premier League and its Commissioner Lalit Modi as Operation Second Inning. Now with a clear indication from Finance Minister Pranab Mukerjee in Parliament that all aspects of the IPLs functioning and contracts will be under the Governments scanner,the Enforcement Directorate (ED) also began its inquiry on Monday.

Consultations were held early Monday between officials of the ED and the Central Board of Direct Taxes and sources said the strategy for the inquiry would be formulated in a day or two.

Interestingly,officials said,besides scrutinising all foreign transactions made in the process of formation of teams and issue of commercial contracts over a three-year period,the ED will also probe the source and routing of funds to the IPL by all team and tournament sponsors.

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With the ED stepping in,the scope of the IPL probe gets much wider with the jurisdiction of proving allegations of money laundering and round-tripping allegedly done by the IPL top brass,team owners and even sponsors.

Over the two years,the IT Department tracked the rise in fortunes of Modi and the companies who were beneficiaries of IPL contracts. Source reports generated by I-T investigators list specific allegations of offshore entities being used to park and transfer IPL funds. These also name Modis associates,including a former IAS officer,and question their role in alleged land conversion and mining deals.

All this intelligence,backed with documents retrieved and received by the IT Department over the past week,is expected to be shared with the ED shortly.

Over the weekend,IT officials held consultations with their lawyers in Mumbai on what aspect of the probe would come under their jurisdiction and which will attract provisions of the Foreign Exchange Management Act (FEMA) and the Prevention of Money Laundering Act (PMLA),both of which the ED enforces. In 2008,the ED had commenced a probe into the fund flows of Rajasthan Royals and that investigation is in progress.

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