Syed Nayyar Uddin Ahmad
CERTAIN new developments demand 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.
To be continued