Real Reasons of Separating PSL from PCB..!

Posted by Syed Nayyar Uddin on December 22, 2016 in Cricket, My Views, Pakistan, Sports |

 

Respected Mian Muhammad Nawaz Sharif Sahab, Prime Minister of Pakistan and Patron-in-Chief of the PCB.

اسلام و علیکم

Sir,

Certain new developments demands that the matter of formation of Pakistan Super League Pvt Ltd. (PSLPL), as a separate company from the PCB, be immediately brought to your kind notice.

Recently, PCB has officially stated the following three reasons for the formation of PSLPL on its website, as per link given below:(Link..http://www.pcb.com.pk/faqs-pakistan-super-league-pvt-ltd.html )

Reason # 1.
There are some serious financial and managerial issues at stake that require subsequent handling by a separate company as many such issues become complex with the addition of more teams in the near future.

First, most PCB earnings come from foreign sources, while most PCB expenses are incurred domestically. Therefore financial handling is very easy like any other Pakistani exporter. But it is the opposite with PSL in which case, most of PSL income comes from domestic sources while almost entire expenses are incurred outside Pakistan. This requires complex foreign exchange reserves and permissions from State Bank of Pakistan for forex payments to foreign venues, event managers, foreign players, boarding and lodging for teams and officials, etc. The facilities currently allowed to PCB for such foreign payments are simply inadequate to cater for the timely and significant transfers of monies required by PSL which are bound to increase with the addition of new teams, players and longer duration of the tournament in 2018 and subsequent years. A separate company with separate financial permissions from the Ministry of Finance and State Bank of Pakistan will be better geared to cope with this problem.

Rebuttal of Reason # 1.

a).

The PCB already operates about four accounts in Dubai as it is earning foreign exchange as income, from ICC and other matches abroad. Therefore, it has deposits there,

PCB is also paying for expenditures in the UAE, in connection with hosting of our matches.

As the PSL is being held abroad there is ABSOLUTELY no issue for the PCB to make payments from its bank accounts.

As such, no government red tape or other rules are any hindrance, in payments of foreign exchange or PKR, abroad or in Pakistan, respectively.

The PCB doesn’t need special permission from government to make payments as PCB already have several foreign exchange accounts in Pakistan, as well.

In view of the foregoing, there is no justification to make PSL a separate company from PCB, on such concocted or imaginary excuses.

b).

State Bank of Pakistan is a govt organisation and provides forex for all genuine requirements. Saying that procedures are difficult to comply is like criticising govt of Pakistan and its rules.

If PCB and PSL earnings and spendings pattern are inverse to each other, that should act as a blessings: as combining both, solves the problem.

Why a separate company is needed to obtain a special financial permission?

Finance ministry is always authorised to issue SRO allowing PCB to make payments in dollars to all foreign based players and organisations. All Pakistan based organisations, players and officials should be paid in local currency. This may be one of the reason why the proposal for new organisation is being fast forwarded, so that to get payments in foreign currency, resultantly getting savings on income tax.

If PSL is made a division of PSB, then a simple SRO from finance ministry will solve all their problems.

Remember, in corporate sector it is common practice to produce for local market and for exports. They keep separate details of accounts to avail export concessions, still annual accounts are prepared as one company.

Since, PCB always claims to bring corporate culture in it , why not start with this corporate practice.

Reason # 2.

Secondly, the understanding with Franchisees envisages the inclusion of independent professional managerial and financial expertise for purposes of transparency and neutrality in which meaningful and continuous consultancy with franchisees, who have invested millions of dollars into PSL, is made institutional. There is a need for a dedicated team to supervise this dynamic process and purpose.

Reason # 3.

Thirdly, the PCB is subject to political hiccups since it is a statutory body with the Prime Minister of the political party in power as the Patron. The PSL, on the contrary, cannot afford to be subjected to political instability because the investment in it is primarily from the private sector. The PSL financial model is a 10 year model, with negative results for the franchisees in the first few years and huge profits in subsequent years. It needs continuity of policies and management to be successful as additional teams are fielded and more investments are made by new franchisees.

Rebuttal of Reasons 2.

This point is a charge sheet of PCB. It says that a separate organisation is required for the reasons of transparency, neutrality, professionalism and ability to provide consultancy to franchise owners. This is straight forward acceptance that these traits are absent from PCB!!!!!

If we accept this point of view, then the decision of PCB to establish a separate private company for PSL was also non- transparent, biased and non- professional. Therefore, must be nullified by PM’s intervention immediately.

Rebuttal of Reason # 3.

This flimsy argument is not only self-contradictory, but hilarious and ridiculous, as well.

To whom this official statement on the PCB’s website is trying to deceive?

Everywhere, it is being propagated by the top notches of the PCB, in the media and also on the PCB’s website that this PSLPL will be 100% owned by the PCB.

At the same time PCB officially states on its website that “the PCB is subject to political hiccups since it is a statutory body with the Prime Minister of the political party in power as the Patron.”

Now, if the PSLPL will be 100% owned by the PCB, what difference it will make on the control of the government, when the PM of political party in power, will be naturally, the Paton-in-chief.

Furthermore, the above official statement of the PCB, that too on its website, is firstly, not only a clear NO CONFIDENCE on the PM of political party in power, who obviously can not be illegal ruler or dictator of the country; and comes into power with constitutional and legal authority: and secondly, an insult of the authority of the PM of political party in power. Moreover it is also a blatant condemnation/indictment of the political system, enshrined in the country’s constitution; and it is for the Attorney General of Pakistan and legal brains of the country, to determine, whether the top management of the PCB (a statutory body) is guilty of violation of any constitutional clause or/ and rules and regulations of the ESTACODE.

In view of the foregoing, there is now not even an iota of a doubt that the current top management of the PCB is rushing to create PSLPL, out of the PCB, for some hidden and undisclosed reasons, by putting up arguments on official website which absolute does not hold water.

Moreover, general public is being deliberately mislead with statements on media (TV interview dated 10, December 2016 at Express News TV link:- https://t.co/qYBHDk3IwD?ssr=true ) where Mr. Najam Sethi, who holds unprecedented five key positions in the PCB set up (1. Member BOG. 2. Chairman Executive Committee. 3. Chairman PSL 4. Chairman HR Committee. 5. Member Audit Committee) said that out of the PKR 26 crore profit from the 1st PSL, PCB was given profit of PKR 6 crore, instead of PKR 3 crore, due amount.

However, the official statement on the PCB’s website states absolutely a different figure quoted below:

Quote.
“Upon conclusion of all PSL accounts, PCB earned $2.6m profit before tax, while the Franchisees, as expected, showed losses on their initial investment. Being cognizant of this fact, PCB reimbursed them to the tune of $2.2m out of its own profits in order to reduce their losses as pledged during marketing presentations before the process of sale of franchise rights.”
Unquote.

Here, it will not be out of place to mention that PCB in its May 20, 2016 press release (also posted on the PCB’s website) admitted that the total budgeted expenditure of the 1st PSL was $7.71m while the ACTUAL expenditure was $8.93m, which was an excess of $1.22m, which is a very huge difference, requiring audit from the office of the Auditor General Pakistan, rather than leaving the matter to some other auditors.

Another deliberate wrong statement (just to impress the ordinary public) mentioned at PCB’s website is quoted as below:

Quote:
“Over and above this, the PCB’s BoG has set up an Audit Committee headed by Mansoor Masood Khan, President of UBL, to oversee all budgetary issues.”
Unquote.

However, the President of the UBL is Mr. Wajahat Husain since 1 June, 2014 and NOT Mr. Mansoor Masood Khan.

The above contradictions in PCB statements on media are not mistakes, but to deceive, hoodwink and mislead deliberately to hide failures, incompetencies and exorbitant expenditures like spending about PKR 4 crore on a single dinner in Lahore.

It will not be out of place to mention that recently Serena Hotel Quetta, charged PKR 19.25 lacs for food items; and PKR 15 lacs as catering charges for a 400 persons VVIP function, during a visit of the PM to Pishin.

Sir, now just observe the vast difference of charges of a PCB function in the same city i.e. Lahore and out of Quetta function in Pishin.

The question which arises in this regard is that what was the Audit Committee of PCB (headed by the so called president of the UBL) was doing along with the most reputed private auditors. Here it will again be not out of place to mention that according to reports, PCB had earlier employed a GM (F&A), Manager (F) and Manager (A) who previously worked with the firm, which audits PCB accounts.

In this regard, no august member of Board of Governors, no audit committee or no independent auditors, ever questioned the PCB that why the media rights for period 2015-2020 were sold for less amount than the auction amount income of media rights of previous five years.

Now, it is high time that the Patron-in-Chief of the PCB, the Ministry of Inter Provincial Coordination and the Governing Members of the PCB ask the top notch management team, which is at the helm of affairs of PCB’s entire operations to explain, where was the money ($150m will come in 8 years from 2014 which comes to $18.75m per year) which was promised by Mr. Najam Sethi, that it will be coming from the ICC, after (according to Mr. Najam Sethi) Pakistan was made the Big4 of the ICC, as per his following statement published by the daily Express Tribune dated 30 June, 2014, extract quoted below and also link provided below:

Quote.
“That, Sethi claimed, will get Pakistan the most funds after the Big Three.

“We will get revenues on fourth number, and I can say with confidence that in the next eight year cycle we will get $150 million dollars from the ICC,” he said, bringing the total takings to $450 million.

This compares to Pakistan receiving $10 million from the ICC per year in the last seven-year (total $70m) cycle, Sethi added.”
Unquote.

Link:- http://tribune.com.pk/story/729174/big-four-pakistan-to-earn-450-million-in-cricket-cycle/

Sir, the above lengthy details of the utter and absolute management failures of the PCB’s heavy weights, proves that if all of them are allowed to continue with the PCB, they will surely ruin this national organisation, sooner than later, with ideas like formation of PSLPL etc.

As such, it is high time that the PCB is put on the right path, with an immediate surgical operation of replacing the entire set up with people, who love the glorious game of cricket genuinely, are efficient, dedicated and thorough professional and ready to work in harmony; and utilise the experience and wisdom of the senior cricketers, to make the PCB and the domestic cricket structure of Pakistan, best in the world.

Best Regards,

Syed Nayyar Uddin Ahmad

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