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No service tax paid, no balance sheet, BCCI units in mess before Supreme Court D-Day

Racing against time to get their books in order before SC's order on reforms recommended by Justice R M Lodha, the Indian board has its hands full.

Written by Shamik Chakrabarty , Nihal Koshie | Kolkata/new Delhi |
Updated: June 14, 2016 10:53:21 am
DDCA, DDCA balance sheet, DDCA service tax, BCCI, Supreme, Delhi District Cricket Association, DDCA, Justice R M Lodha, Justice R M Lodha committee, cricket news, sports news DDCA has not submitted its balance sheets to BCCI for 3 yrs.

THE Delhi District Cricket Association (DDCA) hasn’t submitted its balance sheets to the BCCI for the last three years. The Assam unit failed to do so this year. Goa hasn’t paid service tax for over five years, leading to Rs 19 crore in dues. And the J&K association is under CBI scrutiny for allegedly embezzling funds of over Rs 100 crore.

Racing against time to get their books in order before the Supreme Court’s final order on reforms recommended by Justice R M Lodha — the order is expected next month — the Indian board has its hands full.

“The BCCI expects every association to follow the procedure and contribute to the development of the game. Money should be utilised properly. If they (affiliates) don’t do that, cricket in India will get into trouble,” says BCCI vice-president G Gangaraju.

Saying that the board has become extra-vigilant about these issues, Gangaraju said, “Earlier, the Board used to be a bit casual about the functioning of the state units. But now strict directives have been issued regarding internal audits and other administrative affairs. The guidelines must be followed.”

Another top official said that the clean-up is proving to be cumbersome. “Some state units are involved in complex court cases, there is also a CBI probe on, we are helpless. We want to follow the Lodhi commission’s recommendation of financial discipline but what can we do?” he said.

Accountability of state units and audit of their accounts are among the key reforms suggested by the Lodha committee. Last month the Supreme Court, in an observation before it went on vacation, had asked the BCCI to submit details of funds it allocated to state associations in the last five years.

It asked the BCCI: “You have transferred Rs 480 crore to these associations in one year. There has to be some credible monitoring mechanism on how this money is used. what development has taken place as far as cricketing infrastructure is concerned.”

Many associations are dragging their feet and remain far from achieving financial discipline. DDCA treasurer Ravinder Manchanda admitted that the state association was yet to complete the procedure of filing balance sheets for the last three years. “The balance sheet for 2013-14 has been signed by most of the directors, the balance sheet for 2014-15 is with the statutory auditor, and we are in the process of preparing the balance sheet for 2015-16,” Manchanda said.

However, DDCA’s joint secretary (company affairs) Dinesh Saini says even executive committee members are kept in the dark on financial matters.

“The balance sheets of the past three years have not been tabled at an executive committee meeting. Moreover, directors don’t even have access to the accounts. I had to approach the courts with a plea to inspect accounts,” Saini said.

According to a top BCCI official, the DDCA will receive its share from the central fund only if it submits audited balance sheets.

In the case of the Goa Cricket Association (GCA), officials failed to pay service tax for five years despite the BCCI, as a rule, adding this tax component to the annual grant given to the state. Sources said that instead of depositing the money to tax authorities, the officials allegedly siphoned off the funds.

Former GCA president Shekhar Salkar said he had red-flagged the issue but officials ignored his demand to appoint a financial advisor. “I believe they defaulted deliberately with an eye to make money. Otherwise, why will this happen, when they have had a system of auditing the accounts. When I was the president for a period of six months, I realised that there were many financial irregularities. I wanted to appoint a financial advisor but they didn’t agree,” Salkar said.

Giving a status report of the case, he said, “Rs 19 crore was due over the last five years as service tax. When the BCCI gave the grant, it sent an accompanying letter saying that the state association had to pay the service tax. In fact, the BCCI contributed Rs 9 crore to the dues. Another Rs 7 crore is still pending out of which around Rs 4 crore has been calculated as interest.”

The Assam body, too, is under BCCI scanner. BCCI secretary Ajay Shirke said, “As for the Assam Cricket Association, I wanted a physical inspection and accordingly, our infrastructure committee headed by Prakash Dixit went there last week. I’m waiting for a formal report.”

Shirke said the other units, too, have witnessed a system failure. “About the DDCA and Jammu and Kashmir Cricket Association, the BCCI doesn’t have control over their internal matters. Our control is basically restricted to stopping their grants, which we already did. All these state bodies won’t be getting any grants from the BCCI until they put their houses in order,” he said.

The Board secretary, however, said that their hands were tied when it came to cleaning the system. “We don’t have the power to adjudicate. In matters like alleged funds embezzlement or tax default, it’s for the custodians of the law and respective regulatory authorities to launch a probe and take punitive measures. Yes, the BCCI can stop allotting (international) matches to state associations for transgressions, which is something we have done except for legal interventions,” he said.

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