A planned acquisition of the Indian Premier League (IPL) franchise Rajasthan Royals by a consortium led by billionaire Lakshmi Mittal and vaccine entrepreneur Adar Poonawalla has triggered a significant legal dispute in London. Two minority shareholders are suing Emerging Media Ventures Ltd., the company that indirectly holds a majority stake in the team, alleging they have been wrongly accused of serious misconduct and denied their rightful share of the proceeds from the franchise's $1.65 billion sale.
According to court filings reviewed by Bloomberg, the shareholders, Bajan Boys Gully Cricket LLC and Halla Bol LLC, claim they are owed $22 million and $28 million respectively from the transaction. They assert that Emerging Media Ventures is attempting to force them to surrender stakes valued at approximately $50 million for a mere £1 (about $1.33). The minority investors have approached a London court seeking to block the enforcement of this share transfer.
Allegations and Denials
The core of the dispute centers on allegations made by Emerging Media Ventures in May, accusing the minority investors of violating company rules. These alleged breaches included claims that Manish Patel, a beneficial owner of both shareholder firms, invested in a team within the National Cricket League in the United States.
The minority shareholders have vehemently denied any wrongdoing. Their legal representatives argue in court filings that Emerging Media Ventures cannot prevent them from investing in short-format cricket leagues in countries where the Rajasthan Royals franchise does not operate a team.
Rising Valuations in Franchise Cricket
This high-profile legal battle underscores the escalating investor interest and soaring valuations within the global franchise cricket market. IPL teams, which began in 2008 with the Rajasthan Royals winning the inaugural season, have transformed into highly sought-after assets in global sports.
The Mittal-Poonawalla acquisition follows other major transactions in the league, such as Kumar Mangalam Birla’s conglomerate acquiring the Royal Challengers Bengaluru for an estimated $1.8 billion. Lakshmi Mittal, the executive chairman of steel giant ArcelorMittal SA, boasts a net worth of nearly $40 billion, reflecting the significant financial power now drawn to the IPL.