Billionaire Lakshmi Mittal’s plan to acquire the Rajasthan Royals cricket franchise has sparked a London lawsuit, with the minority shareholders in the company that owns the team alleging they are being forced to give up their shares worth about $50 million for just £1 ($1.33).
Emerging Media Ventures Ltd., which indirectly owns a majority stake in the Indian Premier League franchise Rajasthan Royals, was sued by two minority shareholders who alleged the company wrongly accused them of “serious misconduct,” denying them their cut from the proceeds of the $1.65 billion sale of the franchise.
Also Read| Rajasthan Royals sold for $1.65B to Mittal-Poonawalla consortium
Emerging Media Ventures hasn’t filed its defense to the lawsuit yet. The company’s lawyers didn’t respond to a request for comment.
The dispute centers around one of the richest assets in global cricket after the popularity of the sport’s shorter format exploded with the Indian Premier League, which features franchises backed by billionaires including Mukesh Ambani and Bollywood celebrities such as Shah Rukh Khan. The IPL grew into a global entertainment powerhouse after its inaugural season in 2008, which Rajasthan Royals won.
A consortium led by Mittal, who was born in the northern Indian state of Rajasthan in 1950, and vaccine tycoon Adar Poonawalla agreed to buy the franchise earlier this year. The deal came soon after another Indian billionaire Kumar Mangalam Birla’s conglomerate bought reigning champions Royal Challengers Bengaluru at about $1.8 billion.
Mittal is the executive chairman of steelmaking giant ArcelorMittal SA and has a net worth of nearly $40 billion, according to the Bloomberg Billionaires Index.
Bajan Boys Gully Cricket LLC and Halla Bol LLC, the minority shareholders in Emerging Media Ventures, claimed in the London lawsuit that they are owed $22 million and $28 million respectively from the sales proceeds. They urged a London court to stop Emerging Media Ventures from enforcing the transfer of their shares, according to court filings.
Emerging Media Ventures sent letters in May accusing the minority shareholders of breaching the firm’s conduct rules, according to their court filing. The letters also alleged that Manish Patel, one of the beneficial owners of the two firms, invested in a team in the National Cricket League in the US.
The two firms deny any misconduct or any breach of contract. Emerging Media can’t prevent shareholders from participating in short form cricket in countries where the Rajasthan Royals franchise has no team, their lawyers argued in the filing.
