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India Cements approves de-merger of IPL franchise into subsidiary
MUMBAI: The India Cements board has approved the transfer of Indian Premier League (IPL) franchise Chennai Super Kings (CSK) to a wholly owned subsidiary, Chennai Super Kings Cricket Ltd (CSKCL).
The board has also given its nod for reorganisation of CSKCL under which the ownership of the IPL franchise will be held by shareholders of the company, subject to necessary approvals.
The company had last week informed the BSE that it would transfer the IPL franchise to the new subsidiary and it has completed the required documentation for the same.
On 26 September last year, the board of directors of the company had approved the proposal to demerge CSK into a wholly owned subsidiary of the company by transferring its net assets at cost. It had stated that the effective date of transfer would be 1 January 2015.
The move comes against the backdrop of a Supreme Court order clearly stating that serving cricket administrators cannot have commercial interest in the game at the same time.
The de-merger is part of suspended BCCI president and India Cements CMD N Srinivasan’s strategy to make a comeback in the board politics by disassociating himself from the IPL franchise.
“Pursuant to the decision of the board of directors of India Cements Ltd, the company transferred the IPL franchise rights to its wholly owned subsidiary Chennai Super Kings Cricket Ltd,” Srinivasan told reporters after the meeting.
He further said, “The board considered a proposal for reorganisation of Chennai Super Kings Cricket Ltd under which ownership of the franchise will be issued to the shareholders of India Cements Ltd, subject to necessary approvals.”
Srinivasan added that “this is the first step in slowly getting into a fully cement-focused company” while declining to comment on contentious issues.