Lalit Modi Scam: Rise and Fall of the IPL Mastermind
Created on 04 May 2021
Wraps up in 6 Min
Read by 49.1k people
Updated on 26 Aug 2023
A saga or a fiasco, what was it? There are two sides to the story of the architect of our beloved IPL. But many are unaware. So, today, we’ll tell you...
Most Indians, irrespective of how much they know about the game, enjoy watching IPL every year. Especially this year, the game seems to get interesting due to its twists and turns with every passing day, keeping us distracted during the scary times of the pandemic.
If you are aware of IPL, you surely must be aware of the man behind this revolutionary series, Mr. Lalit Modi, the then Vice President of the Board of Control for Cricket in India (BCCI). He received many awards and much appreciation, specifically in relation to the introduction of IPL. It surely did change the lives of many budding cricketers too. But the real question here is, is he worth all the praises he received? Did he actually do it for the common good, or had personal interests involved?
Today we’ll discuss the story of this mastermind.
Initial days of Lalit Modi
Born in 1963, Lalit Kumar Modi hails from a prominent business family in India. His grandfather Gujarmal Modi had established a conglomerate in 1933 by the name Modi Group which started off as a sugar mill and later diversified into various business verticals like entertainment, tea, and beverages, personal care, agricultural chemicals, cigarettes manufacturing, among others. It was a family business that was inherited by his sons.
Finishing his early years of education in India, Lalit Modi moved to the US to study Electrical Engineering and Business Administration. He couldn’t manage to complete the course, but ended up getting arrested for cocaine trafficking and second-degree kidnapping. He was sentenced to 2 years of imprisonment, which later came down to 100 hours of community service. That was a fraudster in the making!
Subsequently, he managed to come back to India, stating he was ill, and joined his family business.
When Lalit Modi steps into business...
In 1993, he started his own business, Modi Entertainment Network, to facilitate the streaming and viewing of international programs and events in India. Though his company did well, it seemed like he wasn’t the best person one would enjoy working with.
Realizing the love Indians have for the game of cricket, and the private sports leagues that he witnessed abroad, he conceived the idea of IPL. Long-format cricket tournaments like Test and One-day are good to judge a cricketer, but given the declining attention span of the audience, T20s were gaining pace. Add a little money factor to that, some glamorous advertisements & sponsorships, and you have one of the world’s evolving sporting leagues, the IPL. That was clearly a cash cow for all stakeholders.
But it was then, when his idea was initially rejected by the BCCI, that he resolved to join the Board. He started with Himachal Pradesh Cricket Association and gradually paved his way to reach the position of Vice President of BCCI in 2005.
In 2008, he, along with the other board members, launched the Indian Premier League. Lalit Modi was the first chairman of IPL.
You might wonder, Lalit Modi so far seems like a shrewd businessman and a very determined individual, so where did things start to plummet? Continue reading to find out.
When the mastermind commits fraud...
One significant wrongdoing that Lalit Modi is accused of is the MSM and WSG facilitation fee scam. This scam took place when Lalit was the IPL Commissioner. When awarding the media rights, the then MSM (Multi Screen Media Limited, now Sony Pictures Networks India) approached BCCI, to which the latter informed that it had awarded the media rights of telecasting IPL to World Sports Group (WSG) Mauritius and that, if paid a facilitation fee of Rs. 425 crore to WSG, WSG would relinquish its rights. Agreeing to this, MSM and WSG Mauritius entered into a contract, and MSM initially paid Rs. 125 crores. This was paid into an account maintained in Mauritius.
But in reality, there was no such enforceable agreement between BCCI and WSG. As per the statement of the then secretary of BCCI, these contracts were negotiated only by Lalit Modi. A report according to the ED states that Lalit Modi might be a beneficiary of the Rs.125 crore already paid by MSM to WSG group.
Lalit Modi has also been charged with benefitting his friends and family from IPL by transferring funds to them, secretly making them the owners of the teams without any proper disclosures.
This man seems to have strong political connections too. As a close associate of Vasundhara Raje, the then-Chief Minister of Rajasthan, Lalit became quite influential in that state also. There have been accusations on Lalit that he performed various dubious transactions with Raje’s son’s business in the form of a series of loans routed through a fictitious Mauritius-based company.
And the frauds continue...
Lalit Modi is also accused of rigging bids when he added two clauses without permission while inducting two new teams into the IPL. These clauses were added in order to favor Videocon Group and Adani Group. Also, he violated the confidentiality agreement when he tweeted the shareholding pattern of the Kochi Tuskers Kerala franchise, which also led to the resignation of the then minister of state for external affairs, Shashi Tharoor.
The Kochi franchise complained to the BCCI that, at a meeting (a meeting Modi has denied), Modi had threatened the representatives of the Kochi franchise to "give up the franchise.” He did this as he wanted another group to win the bid. And the list continues...
Doomsday for the mastermind-turned-fraudster
Modi was suspended as chairman and commissioner of IPL in April 2010. A suspension notice and a 34-page letter, listing 22 charges of impropriety, were served via email on Modi.
In September 2013, the BCCI's disciplinary committee, manned by Arun Jaitley and Jyotiraditya Scindia, found Lalit Modi guilty on eight counts, including financial irregularities, misconduct, indiscipline, and "actions detrimental to the interest of the BCCI.”
In 2018, the Enforcement Directorate penalized BCCI, N.Srinivasan (former chairman), and Lalit Modi with a fine of Rs. 121.56 crore. This was concerning the violation of the FEMA Act while transferring funds for the 2009 IPL held in South Africa. It was stated in the order that RBI guidelines for transferring money abroad were violated.
Lalit Modi flees India
This man is wanted by the Indian law enforcement agencies for cases of financial irregularities and tax evasion dating back to 2010.
And as the trend goes, “Bye-bye, India.”
Lalit Modi fled from the country to seek asylum in the United Kingdom, stating threats from the Underworld. It is said that his political connections helped him escape the country without much of a hassle.
Interpol, the international law enforcement agency, issued a light blue notice against Modi to be arrested on Indian soil.
The Enforcement Directorate of India had requested Interpol to issue a global warrant against Lalit Modi. However, in 2017, Interpol, which had been delaying the issuance, rejected this request.
The Indian Government and other regulatory authorities are still probing into his case and figuring out ways to extradite him.
The bottom line
It requires a lot of knowledge, resources, influence, and strategic planning to pull off any kind of scam. The end result might not even be worth all the hard work one puts in. But with weak economic systems and no self-integrity, scams like these are quite prevalent in India.
Lalit Modi indeed is a smart man with good business acumen but with no ethical values. Had he put his resources and intelligence to good use, it would have been beneficial to him as well as the society at large.
This should serve as an important lesson to everyone planning to go big in life. There might be situations in life where you’ll have all the power, all the money you need to conquer parts of the world. But if you put your financial or diplomatic power to evil use, there’s no leeway for you. A day will come when the events will unravel, and you’ll be out there blaming the same power you once took pride in.
So, aim high but be grounded!
Anyway, what’s one thing that you feel was a lesson for you from this story? Let us know in the comments below.
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