How can East Bengal remove their transfer ban and which party is liable to pay the players?

The All India Football Federation (AIFF) handed East Bengal with a transfer ban on August 6, 2021, for non-payment of salaries to three Indian players, namely Rakshit Dagar, Abhas Thapa and Pintu Mahata.

The combined amount due to the three players is close to INR 12 lakhs with Mahata’s salary taking up the larger chunk (INR 9 lakhs). It must be noted Mahata’s case is still pending with the AIFF. If the payment issue is not resolved and a ban is imposed as a result, then East Bengal won’t be able to appeal or lift it as it is a non-compliance of judicial decision.

How can East Bengal remove the transfer ban?

Starting August 6, 2021, in the next 45 working days, the club has to pay the entire amount in order to remove the ban. Only then can the ban be removed and East Bengal can register new players for the upcoming 2021/22 season.

Who will clear the players’ dues in order to uplift the ban?

The three players mentioned above were registered during the Quess East Bengal era. All three players were signed on two-year contracts but since last season, after Quess Corp left, they were not included in the team neither were their salaries for the second year of the contract paid.

As per the term sheet signed between East Bengal and their investors Shree Cement on September 1, 2020, the company is not liable to pay off any debt which was incurred before the term sheet was signed. So legally, East Bengal are bound to clear the pending salaries.

But if the club signs the final agreement, Shree Cement are willing to pay off the debts in order to revoke the ban but on the condition that the club will pay them back the amount within 30 days upon which interest will accrue.

If the club fails to pay back the investors, then the company will realise the amount from the membership fees of the club. Accordingly, they have asked the club to hand over the list of the members of the club.

Initially, Shree Cement had planned to realise the sum by liquidating East Bengal’s stake in the joint-venture which is 24 per cent but upon the officials’ request, the investor has agreed not to liquidate more than four per cent from the clubs’ stake.

What is the latest between East Bengal and Shree Cement?

After Quess Corp parted ways with East Bengal in June 2020 after being the club’s investor for two seasons, Shree Cement came on board as their new investor which facilitated the club’s move to the Indian Super League (ISL). They then proceeded to establish a joint venture named Shree Cement East Bengal Foundation, in which the cement giants held 76 per cent stakes while the club had 24.

After Shree Cement’s arrival, a term sheet was signed by both parties in September 2020 in the presence of West Bengal Chief Minister Mamata Banerjee who had played an important role in bringing the company on board as the club’s new investor.

Based on the term sheet, the club’s sporting rights as well all its assets and properties (including intellectual) were reportedly transferred to the newly formed joint venture between the two parties. Even though the term sheet has been signed, a final binding agreement of the deal is yet to signed by the officials despite multiple reminders.

Shree Cement has already sent a revised version of the final agreement to the club on August 16 and are awaiting a response from the club officials.