Only days after Royal Challengers Bengaluru (RCB) won their inaugural Indian Premier League (IPL) in match against Punjab Kings in Ahmedabad, the talk of a sale of the franchise started doing the rounds. But Diageo India, the company which owns RCB and is a subsidiary of UK-based Diageo Plc, put the rumours to rest soon enough.
Speaking to the Bombay Stock Exchange (BSE) and its Surveillance Department on Tuesday, Diageo explained that the reports of a sale were purely speculative. The company maintained that no such transaction was underway.
“The company would like to clarify that the aforesaid media reports are speculative in nature and it is not pursuing any such discussion. This is for your information and records.”
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These explanations followed a report by Bloomberg that Diageo has been engaged in early discussions with advisers about the sale partial or whole of the RCB franchise. The report was speculative that Diageo would look for a price tag as much as $2 billion for the team. Diageo owns RCB through its Indian unit, United Spirits Ltd.
After the speculation, United Spirits’ shares jumped up to 3.3% on the Mumbai bourse on Tuesday morning, a five-month high. It caught the attention of the regulators and resulted in Diageo making a formal notification to the BSE. Company Secretary Mital Sanghvi explained the company’s stand, pointing towards its responsibilities as a BSE-registered company, particularly as the unchecked news directly affected share movement.
The timing of these events also coincides with increased scrutiny of RCB following a tragic stampede at Bengaluru. On June 4, for a city-wide celebration of the team’s victory in the IPL, nearly 2.5 lakh fans swarmed the M. Chinnaswamy Stadium. What began as a celebratory occasion became violent, as a stampede claimed the lives of 11 people and injured 56.
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The incident has triggered criticism of event management procedures and put further pressure on the ownership of the franchise, attracting public and administrative attention to safety procedures.
