Kolkata’s historic club– the iconic SC East Bengal which turned 100 two years ago – is stuck in a fierce possession battle between club officials and investor, Shree Cement. Even as intermediaries are trying to resolve the fight, the club gazes at an uncertain future.
The two-month-long deadlock ascended after club officials declined to sign a “definitive agreement” over a previously agreed-upon term sheet with Shree Cement. The company invested close to ₹55 crores in the club but has put further investments on hold, sources say. The club’s social media page on Twitter remains inactive.
Shree Cement, registered on the bourses, announced in September 2020 that it was picking up a 76 per cent stake in East Bengal. The attainment came as a shot in the arm for the beleaguered club after Quess Corp, another listed entity, pulled out as investors following differences with the club officials. The investment by Shree Cement paved the way for East Bengal – often called the ‘Red and Yellow’ because of their jerseys – to enter the Indian Super League.
Distress began in June onwards, at the time of signing the definitive agreement. The club officials reportedly feared that clauses like restrictions to enter the sanctified precincts (called the Tent) could lead to curtailing members’ access. A senior executive committee member said that there were other clauses like Shree Cement getting “all sporting rights” and even the possibility of a name change that could ultimately lead to a change in the “club’s character”.
According to Sandip Ghose, Corporate Strategy Adviser, it is not likely for East Bengal to have the best of all worlds. Either the franchise’s performance is so strong that sponsors queue up, or one brings in an investor who will dictate terms. “You cannot have the cake and eat it too, which seems to be what East Bengal wants. The rules have changed, world-over and in India,” he said.
Two meetings were arranged on Friday in a bid to break the impasse. First was a meeting of the mediators with the club officials to be followed by a meeting of the working board of the club.
However, the second meeting was called off. East Bengal Club in a statement said a four-hour meeting took place with the mediators. “We have placed our viewpoints and await their response based on which the next course of action will be decided.”