According to reports, top auditors have allegedly uncovered substantial irregularities, including non-transparent contracts and significant losses amounting to Rs14 billion, in the financial records of the Pakistan Super League (PSL).
Information obtained from documents indicates that the Pakistan Cricket Board (PCB) entered into a non-transparent contract valued at Rs1.4 billion for the sale of TV broadcasting rights.
The PCB incurred financial losses amounting to Rs908 million due to an irregular advance payment made to vendors for services, a lapse attributed to the absence of well-defined financial rules, as highlighted in the report by the Auditor General of Pakistan (AGP).
Additionally, the non-authorization of one of the joint bidders for TV broadcast rights for PSL 7-8, which amounted to Rs4.3 billion, along with an irregular renewal of the percentage share of franchisees for the central pool of income, resulted in a further loss of Rs1.6 billion, as indicated in the audit report.
The audit report reveals that the PCB board granted a non-transparent contract worth Rs1.4 billion for the sale of TV broadcasting rights, thereby violating clause 3(3) of PCB Constitution SRO 43(KE)/2014, which underscores the importance of transparent operations. The agreements with M/S Techfront and M/s Blitz for the sale of Global and Local TV broadcasting rights led to a failure in recovering the Global Live Streaming amount, totaling Rs194.741 million.
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A comprehensive audit further brought to light a lack of transparency in two significant contracts, one valued at Rs338 million with M/S Transgroup FZE for the sale of Instadia sponsorship rights, and another amounting to Rs181 million for the sale of live streaming rights.
The PCB management also engaged in non-transparent agreements with M/S Khaleef and Transgroup FZE for the graphic interchange rights and truck branding rights sale, totaling Rs46 million and Rs15 million, respectively. Another 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 led to a payment of Rs147 million due to an unwarranted provision for doubtful debts.
The PCB management faced challenges in recovering outstanding dues amounting to Rs133 million from M/s Khaleef Technologies Incorporated. The audit team uncovered a critical issue where the PCB jeopardized PSL revenue by not securing bank guarantees from franchises. Franchise rights for PSL teams in PSL-V were granted to various franchises for a total of Rs3.2 billion, posing a risk to the financial stability of the league.
The auditors discovered a lack of authorization for one of the joint bidders in the TV broadcast rights for PSL 7-8, totaling Rs4.3 billion. Additionally, they identified an irregular broadcasting contract that had been awarded to an FM radio station, with outstanding dues of Rs14.274 million remaining unrecovered.
The auditors identified a significant issue concerning the non-recovery of a Global TV Broadcast fee totaling Rs1 billion. In response, the PCB management opted to roll over a considerable sum of Rs758,745,086 in Habib Metropolitan Bank Limited for a duration of one year. This decision led to an unauthorized absorption of incremental costs, ultimately resulting in a substantial loss of Rs723 million for the PCB.
Furthermore, the PCB absorbed additional costs related to the travel and accommodation of foreign players, match fees, daily allowances, and extra production expenses, amounting to Rs178 million and USD 2.4 million (equivalent to Rs545 million at the exchange rate of Rs225). Surprisingly, these costs for the remaining 20 matches of PSL 6 played in the UAE were supposed to be charged to the franchises but were erroneously booked to the PCB.
The audit also brought to light an irregular renewal of the percentage share of franchisees in the central pool of income, causing a substantial loss of Rs1.6 billion. Another concern raised by auditors pertained to the non-transparent award of the contract by the PCB for the sale of live streaming rights, valued at US$3 million. These findings highlight a need for enhanced financial oversight and governance within the PCB to prevent such losses in the future.
The PCB recently finalized an agreement with Blitz Advertising Pvt Ltd, selling television broadcast rights and live streaming rights for a total of US$3 million. However, it is noteworthy that the PCB failed to deduct income tax from the prize money, which amounted to Rs32 million. The management disbursed Rs213 million in prize money to match winners, players, and others during PSL-5, encompassing four matches, and PSL-VI.
In the financial records for the year 2020-21, the PCB management in Lahore recorded an expenditure of Rs147 million as doubtful debts in the profit and loss statement for PSL-6, as per the auditors’ findings.
Via Hum News
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