Trouble arising among Punjab King owners?
There are reportedly some serious issues arising between the owners of the famous IPL franchise- Punjab Kings. Tensions arising between the partners are due to, as suggested by the reports, significant differences that have emerged between the co-owners. The condition is speculative and it has even reached the courts, with one of the team’s owners, Preity Zinta taking legal action against another co-owner.
Court Appeal by Preity Zinta
Preity Zinta has filed an appeal in the State High Court against Mohit Burman who holds a 48% share in Punjab Kings, the highest shareholder of Punjab Kings. Preity Zinta herself owns a 23% share of the franchise through KPH Dream Cricket Private Limited.
The reason behind this appeal is that she wants to restrain co-owner Mohit Burman from selling a portion of his shares to another party.
Incidentally, Burman holds the largest share, with 48 percent in KPH Dream Cricket Private Limited. Ness Wadia is the third owner in the promoter group, possessing a 23 percent shareholding, while Karan Paul, the fourth owner, holds the remaining shares.
Preity Zinta’s court appeal concerns Burman’s reported plans to sell a portion of his shares, which he denies. Burman, who is associated with the Dabur company, as reported on Friday, “I don’t have any plans to sell my shares.” However, reports have suggested that Burman intends to sell 11.5 percent of his stake to an unnamed party.
Dispute over Share sale
The conflict arose because Burman reportedly plans to sell 11.5 percent of his share to an unnamed party, which he denies. There is an internal agreement between the co-owners that if any of them want to sell their shares, they must first offer them to the co-owners and only if the the other co-owners deny to buy that share, they can offer them to other parties. Most crucially, the offer to sell the stake cannot be open-ended and it is always time-bound. The seller can only wait for a certain time for the partners to buy before looking elsewhere.
Preity Zinta has filed the petition under Section 9 of the Arbitration and Conciliation Act-1996 seeking interim measures and direction given the disputes and differences between her and respondent Mohit Burman.
The valuation of the franchises has gone up remarkably, since the inclusion of two new teams in the IPL in 2022. On average, a moderately successful franchise can command a value of up to 650-700 million dollars which could be between INR 5300 crore and INR 5800 crore. The 11.5 percent of that valuation would be in the approximate range of INR 540-600 crores.
The case is scheduled for a hearing on August 20.
