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Kolkata’s beloved institution – the iconic East Bengal football club which turned 100 two years ago – is locked in a fierce ownership battle between club officials and investor, Shree Cement. Even as mediators are trying to resolve the conflict, the club stares at an uncertain future.
The two-month-long impasse arose after club officials refused to sign a “definitive agreement” over a previously agreed upon term sheet with Shree Cement.
Read more: Shree Cement to acquire iconic football club, East Bengal
Shree Cement, listed on the bourses, had in September 2020 announced that it was picking up a 76 per cent stake in East Bengal. The acquisition 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. In fact, 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.
The company invested close to ₹55 crore in the club but has put further investments on hold, sources say. The club’s social media page on Twitter stands inactive.
Set up in 1920, East Bengal was known as the club of migrant Bengalis (those who moved to West Bengal during 1947). Their legendary rivalry with Mohun Bagan – the cross-town club consisting of native Bengalis – is a stuff of popular folklore captured in in cinema and Bengali literature.
Series of disagreements
Trouble began June onwards at the time of signing the definitive agreement. The club officials reportedly feared that clauses like restrictions to enter the hallowed precincts (called the Tent) could lead to curtailing members’ access. A senior executive committee member told BusinessLine 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”.
BusinessLine tried to reach out to the Bangurs, promoters of Shree Cements, but they remained unavailable for comments. According to Sandip Ghose, Corporate Strategy Adviser, it is not possible for East Bengal to have the best of all worlds. Either the franchise 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.
Breaking the deadlock
Two meetings were scheduled on Friday in a bid to break the deadlock. First was a meeting of mediators with club officials to be followed by a meeting of the working committee 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.”
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