IPL

IPL Will Use ZERO Percent of the Water That Sugarcane Does

Indian-Premier-League-IPL-logo

The Board for Control of Cricket in India (BCCI) is where politicians from across party lines come together. And given this, you don’t expect it to be the most transparent and fair institution going around. Over and above this, the BCCI also has monopolistic tendencies. Hence, in most situations I would not support BCCI on an issue.

Nevertheless, the entire issue of moving the Indian Premier League(IPL) T20 cricket tournament out of the state of Maharashtra, in order to save water, is basically nonsense. The real issue when it comes to a water crisis in Maharashtra is the agricultural production of sugarcane and not IPL. Allow me to explain.

Take a look at the following chart.

Chart-1.2: State-wise Shares in Production of Sugarcane and Sugar

Maharashtra is the second largest producer of sugarcane in the country after Uttar Pradesh. It is also the largest producer of sugar, which is a by-product of sugarcane. Maharashtra produces more sugar than Uttar Pradesh primarily because the sugarcane produced in the state has a higher sucrose content. In fact, among all states, Maharasthra has the highest sugar recovery rate of 11.1% from sugarcane.

Getting back to the issue of water and sugarcane. As TN Ninan writes in The Turn of the Tortoise: “Nationally, the bulk of the water is used for agriculture…Cropping patters have developed such that water-intensive crops are grown in water-scare areas—like [rice] paddy in Haryana and sugar cane in Maharashtra.”

In fact, Maharashtra uses a lot more water to produce sugarcane than other states like Bihar. As the Commission for Agricultural Costs and Prices(CACP) points out in a document titled Price Policy for Sugarcane—2015-16 Sugar Season: “Water productivity analysis shows that Bihar consumes just 822 litres of water to produce a kilogram of sugar compared to over 2100 litres in Maharashtra, and more than 2200 litres each in Andhra Pradesh and Tamil Nadu. Thus, Andhra Pradesh, Maharashtra and Tamil Nadu consume an additional 1300 to 1400 litres of water over and above what it takes Bihar to produce a kilogram of sugar.”

Andhra Pradesh produces only 4% of India’s sugarcane, so it doesn’t really matter much, if it is a water guzzler. Maharashtra and Tamil Nadu between them produce nearly one-third of India’s sugarcane (22% of Maharashtra and 10% for Tamil Nadu). Given that they use a huge amount of water doing so, this shouldn’t be the case.

As CACP further points out in the case of Maharashtra: “In Maharashtra, sugarcane cultivation, which is on less than 4 percent of the total cropped area of the state, takes away almost 70 percent of irrigation water in the state. This leads to massive inequity in the use of water within the state.”

As mentioned earlier, it takes 2100 litres of water to produce one kilogram of sugar in Maharashtra. This basically means that it will take around 2100000 litres or 2.1 million litres of water to produce one tonne or 1000 kilograms of sugar.

It is estimated that the twenty IPL cricket matches being played in Maharashtra would end up using six million litres of water. How has this estimate been arrived at? A public interest litigation has been filed in the Bombay High Court stating that IPL cricket matches should be moved out of Maharashtra.

Ankita Verma, the lawyer for the petitioners told Rediff.com: “International maintenance for pitch guidelines state that for each match you need three lakh litres of water for one ground. If you multiply that for the 20 matches that will be played here, you will come to the figure of 60 lakh litres [or 6 million litres] of water.”

The BCCI puts the number at four million litres, reports Mint. Let’s take the higher of the two numbers of six million litres of water. As mentioned earlier, it takes 2.1 million litres of water to grow one tonne of sugarcane. Hence, for IPL the total water being used is what would have been good enough to produce less than three tonnes of sugarcane, actually 2.86 tonnes to be very precise.

Hence, the entire argument of IPL cricket matches leading to a wastage of water is basically nonsense. Sugarcane is the real water guzzler in the state of Maharashtra. In 2013-2014, the state produced 75,384,000 tonnes of sugarcane, which would have needed around 158,306,400 million litres of water (75,384,000 x 2.1).

On the other hand, IPL this year will end up using six million litres of water, which would essentially be good enough to produce three tonnes of sugarcane.

So the total amount of water used by IPL will be around 0.0000038%(6.1 million litres expressed as a percentage of 158,306,400 million litres) of the water used to produce sugarcane in Maharashtra in 2013-2014. The proportion is so small that we can even round it off to 0%. This entire argument to move IPL out of Maharashtra is basically nonsense. The real issue is the production of sugarcane in the state.

Of course, no noise is being made against the excessive consumption of water in the production of sugarcane primarily because some of the bigger politicians of the state of Maharashtra are also sugar barons.

There are other issues also that need to be discussed here. India produces much more sugarcane than it consumes. The CACP estimates that the total demand for sugar in India (domestic demand plus bulk demand) is at 24.3 million tonnes. The domestic demand being 12.3 million tonnes and the bulk demand being 12 million tonnes.

In 2014-2015, India produced around 28 million tonnes of sugar. This is 3.7 million tonnes more than demand. This excess sugar is exported. We need to realise that when we export sugar, we are essentially exporting water. As Ninan points out: “Growing sugar cane, even more water hungry than[rice] paddy, in water-scarce Maharashtra is equally contraindicated—especially since the country happens to be surplus in sugar most of the time, and exporting sugar amounts to exporting water.”

And a country as water-constrained as India is, should not be exporting water. To conclude, as CACP points out: “Future growth of cane in Maharashtra is likely to be severely hampered by scarce water supplies unless much of sugarcane is put on drip irrigation or varieties are evolved that use less water. Given that sugarcane is a water guzzling crop, its long term development must ensure that water pricing policies are formulated in a manner that reflects its scarcity.”

And this is something worth thinking about.

Disclosure: The basic idea for writing this column came after reading Sunil Jain’s column titled IPL vs sugarcane: That’s really the equation in Maharashtra in The Financial Express.

The column originally appeared on Vivek Kaul’s Diary on April 12, 2016

 

 

Of Yuvraj Singh, stock markets and the Vietnam War

 yuvraj

Vivek Kaul

 It is in the last week of March 2014 that I am writing this piece. The stock market in India is flirting with all time high levels. At the same time in the T20 cricket World Cup that is on, Yuvraj Singh’s bad form with the bat continues (as I write India has played two matches, and in both, Yuvraj has failed with the bat).
Despite the fact that the stock market is flirting with all time high levels, there are still a lot of investors who are holding onto stocks they had bought at the peak levels reached in 2008. Real estate and infrastructure stocks were a favourite among investors back then.
Once the stock market started to crash in 2008, these stocks crashed big time. They still are nowhere near the high levels they had achieved way back in 2008. And more than that, the prospects for these sectors(particularly real estate) in India, are not looking good either. Nevertheless, there are still some investors who have held onto these stocks bought in 2008, in the hope that these stocks will make money for them one day. So what is happening here? Barry Schwartz explains this in his book The Paradox of Choice. As he writes “People hold on to stocks that have decreased in value because selling them would turn the investment into a loss. What should matter in decisions about holding or selling stocks is only your assessment of future performance and not (tax considerations aside) the price at which the stocks were purchased.”
But the price at which the stock is bought does turn out to matter. This fallacy is referred to as the sunk-cost fallacy by behavioural economists.
And what about Yuvraj Singh? What is he doing here? Vijay Mallya owned IPL Royal Challengers Bangalore bought him for a mind-boggling Rs 14 crore in a recent auction in the Indian Premier League(IPL). The tournament starts in mid April, right after the T20 World Cup ends. From the way things currently are, Yuvraj doesn’t look in great form. But despite that he is likely to be played by Royal Challengers Bangalore in all the matches that they play.
And why is that? Simply because the sunk-cost fallacy will be at work. The Royal Challengers Bangalore have paid so much money to buy Yuvraj that they are likely to keep playing him in the hope that he will eventually start scoring runs. Schwartz discusses this in the context of professional basket ball players in the United States. “According to the same logic of sunk costs, professional basketball coaches give more playing time to players earning higher salaries independent of their current level of performance,” he writes.
The sunk-cost fallacy is a part of our everyday lives as well. Many of us make instinctive expensive purchases and then don’t use the product, due to various reasons. At the same time, we don’t get rid of the product either, in the hope of using it in some way in the future.
Richard Thaler, a pioneer in the field of Behavioural Economics, explains this beautifully through a thought experiment, in a research paper titled Mental Accounting Matters. “Suppose you buy a pair of shoes. They feel perfectly comfortable in the store, but the first day you wear them they hurt. A few days later you try them again, but they hurt even more than the first time. What happens now? My predictions are: (1) The more you paid for the shoes, the more times you will try to wear them. (This choice may be rational, especially if they have to be replaced with another expensive pair.) (2) Eventually you stop wearing the shoes, but you do not throw them away. The more you paid for the shoes, the longer they sit in the back of your closet before you throw them away. (This behaviour cannot be rational unless expensive shoes take up less space.) (3) At some point, you throw the shoes away, regardless of what they cost, the payment having been fully `depreciated’.”
Along similar lines people hold on to CDs they never listen to, clothes they never wear and books they never read. Keeping these things just holds up space, it doesn’t create any problems in life. But there are other times when the escalation of commitment that the sunk-cost fallacy causes, can lead to serious problems. As Daniel Kahneman, writes in Thinking, Fast and Slow “The sunk cost fallacy keeps people for too long in poor jobs, unhappy marriages, and unpromising research projects. I have often observed young scientists struggling to salvage a doomed project when they would be better advised to drop it and start new one.”
As far trying to salvage doomed projects go, CEOs and businesses seem to do it all the time. As Kahneman points out “Imagine a company that has already spent $50 million on a project. The project is now behind schedule and the forecasts of its ultimate returns are less favourable than at the initial planning stage. An additional investment of $60 million is required to give the project a chance. An alternative proposal is to invest the same amount in a new project that looks likely to bring higher returns. What will the company do? All too often a company afflicted by sunk costs drives into the blizzard, throwing good money after bad rather than accepting the humiliation of closing the account of a costly failure.”
A similar problem afflicts a lot of government infrastructure projects as well, where good money keeps getting thrown after bad. It also explains why the United States kept waging a war in Vietnam and then in Iraq, even though it was clear very early in the process that Vietnam was a lost cause and that there were no weapons of mass destruction in Iraq.
To conclude, it is important to understand why human beings become victims of the sunk-cost fallacy? “Sunk-cost effects are motivated by the desire to avoid regret rather than just the desire to avoid a loss,” writes Schwartz. And if you, dear reader, do not want to become a victim of the sunk-cost fallacy, this is an important point to remember.

 The article originally appeared in the April2014 issue of the Wealth Insight magazine.

(Vivek Kaul is the author of the Easy Money trilogy. He can be reached at [email protected]) 

IPL is a great example of why big brands die hard

Indian-Premier-League-IPL-logoVivek Kaul
The Indian Premier League (IPL), the world’s biggest T20 cricket tournament, has been surrounded by controversies for a while. The latest round started yesterday with a panel appointed by the Supreme Court indicting Gurunath Meiyappan for spot fixing. Meiyappan is the son-in-law of the BCCI president N Srinivasan. Srinivasan also owns the IPL Team, Chennai Super Kings (CSK). He is also scheduled to takeover as the first chairman of the International Cricket Council (ICC) from July 2014.
This is not the first time that controversy has hit the IPL. In the past, there have been issues about the shenanigans of Lalit Modi, and how he started and ran the tournament. There have been issues about the union minister Shashi Tharoor using his late wife Sunanda Pushkar to pick up “sweat equity” in the now defunct IPL team Kochi Tuskers Kerala. Then there have also been issues about spot fixing, leading to the arrest of S Sreesanth, Ajit Chandila and Ankeet Chavan, who played for the Rajasthan Royals cricket team.
But despite these controversies, the brand IPL has held strong and advertisers have thronged to it, year on year. Interestingly, the research firm American Appraisal, in a report titled Clearing the Fence with Brand Value: A Concise Report on Brand Values in the Indian Premier League found that “43 percent of the respondents thought that the controversies surrounding the tournament impacted their new or continued relation with the IPL as sponsors or advertisers.” But more interestingly, “almost half said that the controversies in no way influenced their decision to affiliate with the tournament.” American Appraisal reached out to over 300 companies and ad agencies that are involved with the IPL. 
So what is it that makes brand IPL so strong despite all the controversies that have surrounded it? India is a cricket mad nation and for any company which has a consumer oriented focus, some money to spend and a lazy marketing strategy, it makes sense to be associated with the IPL brand. But that as they say is a no brainer.
The more important question to ask here is why have the companies continued to be associated with the IPL, despite all the controversies surrounding the tournament. Niraj Dawar possibly has an answer in his book Tilt- Shifting Your Strategy from Products to Customers. As he writes “Brands die hard…One consequence of the strong association of a brand with a criterion of purchase is that even when the brand falls behind technologically or fails to deliver on the product, it continues to benefit from the customers’ default assumptions for a long while…Customer associations provide the brand with the buffer that shields it from crises and quality issues.”
The IPL brand is well settled in the minds of the Indian consumer and the controversies that have hit the cricket tournament have been unable to dislodge it. Given this ‘strong’ association of the Indian consumer with the IPL, it is not surprising that companies and their brands want to continue to be associated with the T20 tournament.
This, despite the fact that the IPL may have failed to deliver on its main product, which is an honestly and competitively played twenty over cricket match. For all we know that may not be happening, given that the owners of IPL teams (like Gurunath Meiyappan of CSK and Raj Kundra of the Rajasthan Royals) may have been betting against their own teams.
A report in the Mumbai Mirror newspaper points out “In his exhaustive and extensive report on the spot-fixing scandal in last year’s Indian Premier League, Justice Mukul Mudgal has raised suspicion about one particular game between the Chennai Super Kings and the Rajasthan Royals. While the 170-page report largely remains inconclusive over whether matches were fixed in the league, it clearly states this particular match needs to be investigated. “The Committee feels that there is enough information available on record to indicate that a further investigation is required in respect of the match held at Jaipur, between Rajasthan Royals and Chennai Super Kings on May 5, 2013,” the report says.”
Despite this, the Indian cricket fan (who also happens to be a consumer) is not done with the IPL as yet. Once a brand is established consumers typically tend to give it a long rope. As Dawar writes “Microsoft was able to retain most of its customers even through the life of the ill-conceived Windows Vista operating system, a disastrous product that would have been the death knell for a start-up brand. Apple’s reputation was barely dented despite the antenna problems of iPhone 4, AT&T’s spotty coverage, and the embarrassment of prematurely launching Siri, an artificial intelligence bot that was not quite ready for prime time, and faulty Apple iMaps. The brand easily withered these slipups.”
If a start-up would have made any of these mistakes, the game would have been more or less over for it. But that is not the case with big and established brands. Interestingly, the controversies started to hit the IPL only after the first few seasons, and by that time it had already managed to establish itself in the mind of the Indian consumer. As Dawar puts it “Customers are slow to switch, so that even if decline sets in, it is gradual allowing the company time to fix the problem and respond to challenges.”
This time that consumers give a big brand to fix itself can also lead to complacency, as happened in case of BlackBerry. As Dawar puts it “It allows managers the room they need to remain in denial about challengers and challenges. When BlackBerry sales continues to rise, even into 2012 in some parts of the world, its newly appointed CEO felt free to declare early that year, “We have fantastic devices in a fantastic ecosystem. I don’t think there is some drastic change needed.”
We all know what happened to BlackBerry after that. Consumers do give long ropes to big brands, but these are not infinitely long ropes. One day their patience does run out. Maybe, there is a thing or two, the Board of Control for Cricket in India (BCCI) which runs the IPL, can learn from this. 
The article originally appeared on www.FirstBiz.com on February 12, 2014
(Vivek Kaul is a writer. He tweets @kaul_vivek) 
 

Why Pritish Nandy is thoroughly wrong about the IPL

Pritish_NandyVivek Kaul
Pritish Nandy has a major grouse against those who seem to be spending a lot of time in unearthing the rot that has set into the Indian Premier League (IPL). Or so he points out in a blog titled Three idiots and a scam that won’t die.
He feels that this attention to the cricket’s biggest money spinner is undue and is taking away attention from other important issues that plague the country. He also feels that at the end of the day, it doesn’t really matter because Indians will still watch cricket, match fixing or not.
As he writes “The day news channels were chasing Gurunath Meiyappan all the way from Kodaikanal to Madurai to Mumbai to the Crime Branch at midnight, millions were happily sitting in front of their TVs watching Mumbai Indians battling Rajasthan Royals at the Eden Gardens, proving yet again that there are two Indias with their own sets of concerns and priorities. I confess I was among those watching the game, rooting for Rahul Dravid whose team lost with a ball to spare.” 
This is a rather specious argument to make. A lot of people watched the match Nandy is talking about (including this writer). And among those who watched a significant portion must have been rooting for Rahul Dravid and Rajasthan Royals(including this writer). Now that does not mean that people are not bothered about the rot that has set into the IPL and wouldn’t want the dirt to come out. In fact, I can make a similar generalisation and say that a lot of people that I know stopped watching IPL after the spot fixing allegations came out. Also, people were interested in the match to see how Dravid and Rajasthan Royals perform after three of their cricketers were arrested for spot fixing. Truth, as is always the case, is mutli-layered.
Nandy feels that N Srinivasan should be allowed to continue as the President of the the Board for Control of Cricket in India (BCCI). Srinivasan is also the Vice Chairman of India Cements, the company which owns Chennai Super Kings (CSK), the best performing team in the IPL. The logic that Nandy offers is that “a father-in-law is the last person to know what his son-in-law is up to. Allowing him to stay in his holiday home in Kodaikanal is not the same as endorsing his petty vices or (as yet unsubstantiated) attempts to fix IPL matches.” That is a fair point when viewed in isolation.
But how does Nandy explain the zeal with which Srinivasan has gone about disassociating himself and CSK from his son in law Gurunath Meiyappan? The people of this country have even been told that Meiyappan was just an enthusiastic supporter of CSK and nothing more. This despite the fact that there is a lot of evidence in the public domain to the contrary. Gurunath Meiyappan’s Twitter account clearly said he was the Team Principal of the CSK. So did his visiting cards.
As the old adage goes Caesar’s wife should be above suspicion which is clearly not the case here. At least till the various investigations into spot fixing are over, Srinivasan should stay away from the BCCI. And anyway there is a huge conflict of interest with Srinivasan being the BCCI president as well as the Vice Chairman of the company which owns CSK.
As the India Today points out “Srinivasan’s team (CSK) is under the jurisdiction of the tournament’s governing council, which in turn is under his own jurisdiction as the board’s all powerful boss.”
Nandy gives further reasons in support of Srinivasan and calls for the status quo to be maintained. As he writes “But I really think we are all playing into the hands of those who have much more to hide than these dolts. Srinivasan’s enemies (and heaven knows, he has far too many of them) are having a field day. But ask yourself, do you really care whether he heads the BCCI or Sharad Pawar. Or Rajiv Shukla.”
This is a statement which has fallen victim to the fallacy of relevance “two wrongs make a right”. What Nandy is basically saying here is that I know Srinivisan is the wrong man for the job, but then so are Sharad Pawar and Rajeev Shukla, and given that Srinivasan should continue. But since when have two wrongs started to make a right?
Nandy also rues the fact that so much attention has been given to the spot fixing in IPL that the retirement of Vinod Rai, India’s bravest Comptroller and Auditor General has gone unnoticed. As he writes “What bothers me is the carpet bombing scam coverage that ensured there were no goodbyes for the man who with evangelical zeal exposed the sleazy underbelly of Indian politics over the past 5 years, and did his best to set it right. Worse, there was no debate over who his successor ought to be. So the Government sneaked in its own nominee, clearly to undo some of the outstanding work Vinod Rai, India’s bravest Comptroller and Auditor General did in his own low key style.”
In case Nandy does read India’s largest selling English newspaper, The Times of India (Nandy’s blog is published on the newspaper’s website) he would have realised that on May 20, 2013, a full page interview with Rai was published. Now when was the last time you saw a mainstream newspaper carry a full page interview with a retiring bureaucrat? Forget that, when was the last time you saw a mainstream newspaper carry a full page interview with a politician?
Rai’s retirement was well covered by other newspapers as well. Hence, holding IPL responsible for Vinod Rai not getting a proper send off from the media doesn’t really hold. And more than that the media played a huge role in publicising a lot of what was written in the CAG reports on the various scam. Rai admitted to as much in the interview when he said “The other factor that worked in our favour was you – the media, the 24×7 channels. Media has become so alert and it knows what needs to be highlighted. From our report, the media picked up only substantial issues.”
Nandy feels that all the attention that IPL has drawn is putting other issues on the backburner. “Several other crucial issues that were being debated in the public space, like China’s incursions in Ladakh, the Vadera land deals, Muslim youth arrested and held for years on trumped up terrorist charges and now being released and, above all, the Supreme Court demanding the freeing of the CBI from the Government’s unholy clutches are now on the backburner. Even the Ranbaxy issue, where intrepid whistle blower Dinesh Thakur exposed the grave misdemeanours of one of India’s leading pharma companies and the dangers implicit in those for millions of us who buy its products, have been largely ignore,” he writes.
Let’s take the Ranbaxy issue here first. The company has to pay a fine of $500 million for selling adulterated drugs in the United States. This is big news, which was covered on the front pages of most English newspapers. But is this piece of news bigger than spot fixing in the IPL? The answer is no, simply because more readers would want to read about spot fixing than Ranbaxy. And a newspaper has to cater to that basic need.
This will happen anywhere in the world. The readability of any piece of news is likely to decide how much it is played up in comparison to other news. Let me give an example here to elaborate. Lets say baseball or basketball in the United States faces fixing allegations. At the same time some big drug company (lets say Pfizer) is fined for selling adulterated drugs. Which piece of news is going to get more coverage in general American newspapers? Of course the fixing scandal. A business newspaper on the other hand may concentrate more on the drug company. Most Indian business newspapers have covered the Ranbaxy story in great detail.
Also, if any newspaper were to concentrate more on the Ranbaxy issue and not on spot fixing in the IPL, it would lose readers, given that other newspapers wouldn’t be doing the same. Nandy having been an editor in the past, should surely understand this rather basic point.
As far as the other issues like freeing the CBI from clutches of the government is concerned, a lot has been written by newspapers, magazines and websites. And as and when some new information comes out they will surely get back to it.
Nandy concludes his piece by saying “Frankly, my dear I don’t give a damn.” There are number of reasons that the spot fixing issue needs to be sorted out through and through. In the year 2000, a certain Mohammed Azharuddin was accused of match fixing. A lot of evidence was put forward. But ultimately other than a life ban nothing really happened. Azharuddin is now a Congress MP. Another accused Ajay Jadeja, is now a cricket expert on television. It is important that those responsible for the spot fixing in IPL be punished enough so as to ensure that they don’t come back to public life again.
India is a country starved of heroes. Our politicians are corrupt. Our bureaucrats are corrupt. And our businessmen are corrupt. Its the cricketers who are our roles models. And if these role models also turn out to be corrupt, who will we look up to? Given this, the mess in the IPL needs to be sorted out.
Let me conclude with the oft used cliché. Cricket is not just a sport in this country, it’s a religion. And when you mess around with religion, people are bound to be angry.
The article originally appeared on www.firstpost.com on May 30,2013
(Vivek Kaul is a writer. He tweets @kaul_vivek) 
 

Wilful blindness links BCCI, Murdoch and Lehman Bros

sakshi-dhoni1Vivek Kaul 
News of the World was a British newspaper, owned by media moghul Rupert Murdoch, which published its last edition on July 10, 2011. The newspaper shutdown after it came to light that the employees of the newspaper had been hacking phones, using private investigators and even bribing the police to acquire confidential information, which could be turned into sensational news stories.
On July 19, 2011, nine days after News of the World shutdown, Rupert Murdoch and his son James, gave oral evidence to the Select Committee on Culture, Media and Sport of the British Parliament. The Committee asked a stream of questions to the Murdochs.
Adrian Sanders, a member of the committee, asked the question number 269, which put the Murdochs in a lot of bother. This is how the brief conversation that followed the question went:
Q269 Mr Sanders: Finally, are you familiar with the term “wilful blindness”?
James Murdoch: Mr Sanders, would you care to elaborate?
Q270 Mr Sanders: It is a term that came up in the Enron scandal. Wilful blindness is a legal term. It states that if there is knowledge that you could have had and should have had, but chose not to have, you are still responsible.
James Murdoch: Mr Sanders, do you have a question? Respectfully, I just do not know what you would like me to say.
Q271 Mr Sanders: The question was whether you were aware—
James Murdoch: I am not aware of that particular phrase.
Q272 Mr Sanders: But now you are familiar with the term, because I have explained it to you.
James Murdoch: Thank you, Mr Sanders.
Rupert Murdoch: I have heard the phrase before, and we were not ever guilty of that.
In the days the discussion was picked up by the media and there was a lot of discussion around the topic. The Select Committee finally concluded that “If at all relevant times Rupert Murdoch did not take steps to become fully informed about phone hacking, he turned a blind eye and exhibited wilful blindness to what was going on in his companies and publications.”
Before Murdochs were accused of ‘wilful blindness’ the term was used even for the Enron debacle by Judge Simeon Lake. Enron was an American company which went bust more than 10 years back after it came to light that it had been growing by simply fudging its numbers. Jeffrey Skilling and Kenneth Lay, the CEO and Chairman of Enron, pleaded that they just did not know what was going on in the company and hence could not be held responsible for it.
In his summary of the trial, Judge Lake told the jury that “You may find that a defendant had knowledge of a fact if you find that the defendant deliberately closed his eyes to what would otherwise have been obvious to him. Knowledge can be inferred if the defendant deliberately blinded himself to the existence of a fact.” 
As Margaret Heffernan writes in Wilful Blindness- Why we ignore the obvious at our peril “Judge Lake was applying the legal principal of wilful blindness: you are responsible if you could have known, and should have known, something which instead you strove not to see. Skilling and Lay could have known, and had the opportunity to know, just how rotten their company was. Their claim not to know was no excuse under the law. Since they could have known, they were responsible…The law does not care why you remain ignorant, only that you do.”
The concept of ‘wilful blindness’ first appeared in the English courts in 1861. “A judge in Regina v. Sleep ruled that an accused could not be convicted for possession of government property unless the jury found that he either knew the goods came from government stores or had ‘wilfully shut his eyes to the fact’,” writes Hefferman. “Over time, a lot of other phrases came into play – deliberate or wilful ignorance, conscious avoidance and deliberate indifference. What they have all in common is the idea that there is an opportunity for knowledge and a responsibility to be informed, but it is shirked.”
In fact, the current case where three players of the Indian Premier League (IPL) team Rajasthan Royals have been accused of spot fixing, fits excellently into the concept of ‘wilful blindness’. The Board of Control for Cricket in India (BCCI) which runs the IPL has been trying to underplay the scandal and at the same time trying to distance itself from it. N Srinivasan, the President of BCCI, had this to say after the scandal broke out “We will do whatever is necessary. The sport is clean and we are running it clean. We have taken all the steps (to keep it clean). One or two bad eggs here and there cannot sully the entire game.”
The BCCI has taken pains to elucidate that the scandal concerns just one team i.e. the Rajashtan Royals and they have nothing to do it. That possibly also explains why the Rajasthan Royals have filed a first information report (FIR) against the three players and the BCCI has been doing nothing, except for holding meetings and appearing to talk tough.
The few bad eggs explanation has now ended up as an egg on the face of President Srinivasan as Mumbai Police gets ready to question Gurunath Meiyappan, who other than being the Team Principal of the best performing IPL team Chennai Super Kings (CSK) also happens to be married to Srinivsan’s daugther Rupa.
Srinivasan other than being the President of BCCI, happens to own the CSK team. Talk about conflict of interest. Gurunath, more popularly known as Prince Gurunath, is in trouble because of his close links to small time actor turned bookie Vindoo Dara Singh (more popularly known as Jack in betting circles).
While just knowing another person does not amount to guilt, but the fact that Singh had access to the inner echelons of CSK and was even seen watching a match seated next to Sakshi Dhoni (wife of Mahendra Singh Dhoni, who also happens to be the captain of CSK ) does muddle the waters. Even within IPL circles Singh’s role as Jack was pretty well known (a senior functionary of an IPL team has said so clearly on Facebook). So wasn’t this an act of wilful blindness on the part of Srinivasan? Shouldn’t he have wondered what was a bookie doing inside the VIP section, sitting next to the wife of the captain of his cricket team?
The BCCI was also wilfully blind given that last year in a sting operation India TV, had shown that various fringe players in the IPL were ready to be bought for money. There were also allegations of spot fixing. The BCCI suspended some players, but beyond that nothing happened. Of course Srinivasan did make a strong statement. “We will not tolerate this nonsense. We have zero tolerance on corruption and you will not be disappointed by the action we take,” he said.
What makes all this even more interesting is the fact that BCCI is run by politicians from across parties. Sharad Pawar, Arun Jaitley, Rajeev Shukla, Anurag Thakur, Jyotiraditya Scindia, Narendra Modi, etc, are all a part of it. It is difficult to believe that they were totally unaware of what was going on in the league. In face of all this the explanation of there being only a ‘few rotten eggs’ doesn’t really hold.
Margaret Heffernan wrote a very interesting column for the Huffington Post in the aftermath of the Murdoch owned New of the World being shutdown. In this she pointed out that “After every institutional debacle, the arguments are the same: it was just a few bad apples. Nobody at the top is to blame. A few rogue, or over-zealous employees just went off piste. Then the full scale of the debacle emerges and another face-saving fiction emerges: no one could possibly have seen this coming. Both arguments were wrong in Abu Ghraib, at Enron, WorldCom, BP, Countrywide and Lehman Brothers and both are wrong today at News International.”
When the credibility of big institutions like BCCI is damaged, they tend to react in a very similar sort of way. They tend to blame it on a few rotten eggs, even though the entire institution has been wilfully blind.
As Heffernan wrote in another column for the Guardian: “Richard Fuld, the Lehman Brothers CEO, was also wilfully blind. He organised his life to ensure that he never encountered employees unexpectedly. The chief executive of Bear Stearns (a big Wall Street investment bank that went bust a few years back) chose not to implement a form of risk analysis that might actually have revealed how much debt the bank carried. And the Catholic church, when first confronted with the fact of child-abusing priests, chose first of all to take out insurance. All these institutions were blindsided by their choices – that is, they can’t blame their blindness on others.”
The same now stands true for the BCCI as well.
The article was originally published on www.firstpost.com on May 23, 2013
(Vivek Kaul is a writer. He tweets @kaul_vivek)