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ESPNcricinfo staff
November 29, 2011
The BCCI has been served with 19 show-cause notices by India's Directorate of Enforcement for alleged violations of the country's Foreign Exchange Management Act [FEMA] totaling approximately Rs 1077.43 crores (US$ 207.52 million), according to a government report investigating the board and its management of the IPL.
The report states that the Income Tax department has withdrawn the tax exempt status of the board, and claimed back taxes amounting to Rs.118.04 crores and Rs.257.12 crores for the years 2007-08 and 2008-09 respectively.
The BCCI's alleged violations of the FEMA regulations are believed to have occurred when the BCCI moved the T20 tournament to South Africa in 2009 amid security concerns caused by the holding of India' s national elections at the same time as the IPL.
The report also stated that "preliminary investigations have shown prima facie evidence of monopolistic nature of working of BCCI and the companies involved" in awarding media rights for the IPL. The Ministry of Corporate Affairs has therefore been instructed to investigate these issues under the provisions of the Competition Act, 2002.
Speaking in Parliament earlier today, Ajay Maken, India's sports minister, said that various government agencies have conducted inquiries into the allegations of irregularities by the BCCI. As a result of those inquiries, the Service Tax department has determined that as on 31 December, 2010, show-cause notices involving an amount of Rs 159.12 crores have been issued to various service providers/stakeholders in relation to the IPL for recovery of service tax.
Government investigations are also being conducted into "the source of foreign investments in individual teams is being investigated and references through the Foreign Tax Division."
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