New Delhi: Cash-strapped Mohammedan Sporting have been served a reminder to comply with their financial undertakings for continued participation in the Indian Super League.
ISL’s promoters Football Sports Development Limited have served the Kolkata-based side a notice on April 4 of material breach and demanded immediate compliance to furnish bank guarantee as per participation agreement and delay in executing share subscription & shareholders agreement.
After winning the I-League last season to get promotion to ISL, Mohammedan Sporting Club Private Limited (MSCPL) signed a memorandum of understanding (MoU) on August 28, 2024, to bring in Shrachi Sports as a key investor, alongside existing individual investor Bunkerhill Private Limited (BPL), forming a three-way consortium with a share split of 39%, 30.5%, 30.5%, respectively.
But on their debut in the Indian football’s top tier competition they have hobbled on and off the pitch throughout, finishing at the bottom of the 13-team standings with 13 points from 24 matches.
With players often refusing to train and head coach Andrey Chernyshov departing midway over unpaid dues to the tune of three-four months, the Black Panthers managed only two wins and 15 losses in 24 league phase matches.
Adding to their woes is Shrachi Sports’ intimation to FSDL on April 2 that their association with the club has ended, having reportedly funded around half of their budget of approximately Rs 30-35 crore for the ongoing 2024-25 season.
“Please note that the said MoU has expired on 15 December 2024. We are now writing to apprise you that, at this juncture, after having protracted discussions and multiple rounds of negotiations with the representatives of MSCPL and BPL, we have not reached a stage where there is a visibility on the closure of the transaction with MSCPL and BPL. We have also not received any assurance on the possible completion of the transaction with MSCPL and BPL,” Shrachi Sports said.
“We clarify that as on date, Shrachi Sports is not a shareholder of MSCPL, and the amounts transferred to MSCPL by Shrachi Sports are being treated as an inter-company loan, repayable by MSCPL.”
‘Disturbing’
After receiving that letter from Shrachi, FSDL has sprung into action reminding the club that financial stability is one of the fundamental requirements for participation in the ISL.
“We refer to prior correspondence between us, in relation to your failure to furnish the Bank Guarantee as required under the Participation Agreement, and the delay in executing the required definitive share subscription & shareholders agreement (SSSHA) with your investors, more particularly our letter 26th February 2025 and your reply dated 3rd March 2025.
“From time to time, you have assured us that the SSSHA will be executed and by your letter dated 3rd March 2025 you have clearly communicated to us that Shrachi Sports as your key Investor will be on board by 31st May 2025. Relying on your assurances, we have in good faith given you time to complete the transaction and deferred taking any action and continued your participation in the ISL,” FSDl wrote.
“We repeat that, financial stability is one of the fundamental requirements for participation in the ISL, and the imminent withdrawal of your key investor raises serious concerns about the Club’s ability to meet the operational expenses for running the Team.
“It is disturbing that MSCPL failed to disclose any ongoing differences with Shrachi Sports during its active playing phase of the ISL, and this has come to light only after your team has failed to qualify for the play-offs. In the absence of transparency and timely disclosures, we are left to question whether this information was intentionally withheld till now since it would no longer affect your Team’s participation this season.”
‘Termination’
It was also pointed out that as per ISL’s participation rules, Mohammedan should bring in a new investor within 30 days to avoid material breach of the warranty and should inform of their status regarding outstanding dues, including both operational costs and player-related payments, by April 11.
“In light of the above, we require a written response latest by 11th April 2025 providing (i) a detailed plan confirming how and when you intend to secure a replacement investor to comply with your warranty and undertaking; and (ii) a complete and final statement of all outstanding dues for the 2024-25 season including towards players, technical staff and vendors.
“Failure to meet these demands will leave us with no option but to consider further actions, including termination of your participation in the ISL, in accordance with the terms of the Participation Agreement,” FSDL said.
Mohammedan didn’t offer any response immediately but News9 Sports understands they are on the hunt for a new investor, even as they hope to participate in the upcoming Super Cup.
Financially-troubled Mohammedan Sporting have been served a notice of material breach and asked to furnish bank guarantee as per ISL’s participation agreement after pull out of an investor Football Sports News: Latest Cricket News, Cricket Live Score, Sports Breaking News from Sports Today
