Over Rs14 bn irregularities, non-transparent contracts unearthed in PSL accounts

ISLAMABAD: Top auditors have detected non-transparent contracts, losses, and serious irregularities totaling Rs14 billion in the accounts of the Pakistan Super League (PSL).

Official documents obtained by the Hum Investigation Team (HIT) reveal that the Pakistan Cricket Board (PCB) secured a non-transparent contract worth Rs1.4 billion for the sale of TV broadcasting rights.

The PCB suffered losses due to an irregular advance payment of Rs908 million to vendors for services, attributed to the absence of framed financial rules, according to a report by the Auditor General of Pakistan (AGP).

The non-authorization of one of the joint bidders for TV broadcast rights for PSL 7-8, amounting to Rs4.3 billion, and an irregular renewal of the percentage share of franchisees for the central pool of income led to a loss of Rs1.6 billion, according to the audit report.

Auditors noted that the PCB failed to provide records of these transactions and agreements, nor did they inquire into the recommendations given by the auditors. Despite multiple reminders, the PCB management did not furnish the promised details to HIT.

According to the audit, the PCB board awarded a non-transparent contract of Rs1.4 billion for the sale of TV broadcasting rights, violating clause 3(3) of PCB Constitution SRO 43(KE)/2014, emphasizing transparent operations. Agreements with M/S Techfront and M/s Blitz for the sale of Global and Local TV broadcasting rights resulted in a non-recovery of Global Live Streaming amounting to Rs194.741 million.

A special audit further revealed a non-transparent contract worth Rs338 million with M/S Transgroup FZE for the sale of Instadia sponsorship rights. Another non-transparent contract of Rs181 million was awarded for the sale of live streaming rights.

The PCB management entered into non-transparent agreements with M/S Khaleef and Transgroup FZE for the sale of graphic interchange rights and truck branding rights, amounting to Rs46 million and Rs15 million, respectively. An agreement with M/s Transgroup FZE/ITW Consulting FZE for the sale of Instadia sponsorship rights (gold, silver, umpire) amounting to US$ 7.805 million resulted in a payment of Rs147 million due to an unjustified provision for doubtful debts.

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The PCB management also failed to recover outstanding dues worth Rs133 million from M/s Khaleef Technologies Incorporated. The audit team revealed that the PCB put PSL revenue at risk due to non-receipt of bank security from franchises, granting franchise rights of PSL teams to various franchises for PSL-V for an amount of Rs3.2 billion.

Auditors found non-authorization of one of the joint bidders for TV broadcast rights for PSL 7-8, amounting to Rs4.3 billion. An irregular broadcasting contract was awarded to an FM radio against whom outstanding dues of Rs14.274 million remained unrecovered.

A case of non-recovery of Global TV Broadcast fee worth Rs1 billion was also pointed out by auditors. The PCB management decided to roll over Rs758,745,086 in Habib Metropolitan Bank Limited for one year, resulting in an unauthorized absorption of incremental costs, causing a loss to PCB amounting to Rs723 million.

The PCB absorbed incremental costs related to the travel and accommodation of foreign players, match fees, daily allowances, and additional production costs, aggregating to Rs178 million and USD 2.4 million (equivalent to Rs545 million at the exchange rate of Rs225) for the remaining 20 matches of PSL 6 played in UAE. The audit observed that these charges were to be charged from the franchises but were booked to PCB.

Auditors also revealed an irregular renewal of the percentage share of franchisees for the central pool of income, where the PCB management incurred a loss of Rs1.6 billion. The non-transparent award of the contract was given by PCB for the sale of live streaming rights of US$ 3 million.

The PCB entered into an agreement with Blitz Advertising Pvt Ltd for the sale of television broadcast rights and live streaming rights amounting to US$ 3 million. The PCB did not deduct income tax on the payment of prize money amounting to Rs32 million. The PCB management paid prize money of Rs213 million to the match winners, players, etc., during PSL-5 (4 matches) and PSL-VI.

The PCB management in Lahore charged an expenditure of Rs147 million as doubtful debts in the profit and loss statement of PSL-6 during the financial year 2020-21, as per the auditors.