IN WHAT raises questions of potential conflict of interest, Indian cricket team captain Virat Kohli had invested in a company in February 2019, which today is BCCI’s (Board of Control for Cricket in India) official kit sponsor and merchandise partner.
Virat Kohli was allotted Compulsory Convertible Debentures (CCDs) for Rs 33.32 lakh in Galactus Funware Technology Private Limited, a Bengaluru-headquartered company, which owns the online gaming platform Mobile Premier League (MPL). Galactus is a subsidiary of M-League Pte Ltd, a company registered in Singapore in April 2018.
On November 17, 2020, BCCI announced MPL Sports as the new kit sponsor and official merchandise partner for the Indian cricket team.
As part of the three-year agreement, senior Indian men, women and under-19 teams will sport MPL jerseys. The Indian team has been sporting the MPL Sports — an arm of MPL — logo during the ongoing Australian tour. MPL Sports has the right to also sell licensed jerseys and other Team India merchandise.
Kohli was named brand ambassador of MPL in January 2020.
He had endorsed the gaming platform earlier too.
Kohli was allotted 68 CCDs with a face value of Rs 10, each issued at a premium of Rs 48,990 (Rs 33.32 lakh). These CCDs will be converted into equity shares at the end of 10 years, the conversion ratio being 1:1, i.e. one equity share for one debenture. Post-dilution, Kohli will have a 0.051 per cent stake in the company.
Records accessed by The Indian Express show that at the same extraordinary general meeting on February 5, 2019, when Kohli was issued the CCDs, Galactus also issued 34 CCDs worth Rs 16.66 lakh to Cornerstone Sport LLP. Significantly, Cornerstone’s CEO Amit Arun Sajdeh is Kohli’s partner in two other limited liability partnership firms — Magpie Venture Partners LLP and Virat Kohli Sports LLP.
There’s another Sajdeh-Kohli link. Another firm, Cornerstone Sport and Entertainment Private Ltd, of which Sajdeh is the director, manages the commercial rights of Kohli and a bunch of international cricketers including KL Rahul, Rishabh Pant, Umesh Yadav, Ravindra Jadeja, Kuldeep Yadav and Shubman Gill.
When contacted, Sajdeh said there was nothing wrong with the MPL connection. “I have said this time and again, Virat and Cornerstone are free to invest in as many businesses as they wish to. There is no conflict whatsoever as long as Virat is not invested in Cornerstone,” he said.
A month after CCDs were issued to Kohli and Cornerstone, on March 21, 2019, Galactus allotted 14,285 CCDs of face value Rs 100, each at a premium of Rs 48,900 to Bennett Coleman & Company Ltd (BCCL) for Rs 69.99 crore. The CCDs will be converted into equity shares after 10 years, with the conversion ratio fixed at 1:1, i.e., one equity share for one CCD. Despite repeated attempts, BCCL was unavailable for comment.
A top BCCI official said the Indian board was not aware that Kohli and Cornerstone have a stake in MPL. “We cannot be expected to track investments of players,” he told The Indian Express. Another BCCI member said: “He (Kohli) is an influential figure in Indian cricket and such inter-connections aren’t ideal for good governance.”
The Indian board’s constitution does raise a flag about such commercial connections. It defines Commercial Conflict as: “When an individual enters into endorsement contracts or other professional engagements with third parties, the discharge of which would compromise the individual’s primacy obligation to the game or allow for perception that the purity of the game stands compromised.”
Phone calls and text messages to co-founder and CEO of the MPL, Sai Srinivas Kiran G, about Kohli and Cornerstone’s investments in Indian team’s kit sponsors and the possible conflict of interest went unanswered. Queries to the representatives of the company that handles MPL’s public relations also went unanswered.