The conflict between East Bengal club and their investors Quess Corp has once again cropped up after the latter activated the ‘Force Majeure’ clause in the wake of the Coronavirus crisis and have terminated the contracts of the current set players post April 30, 2020.
But the question that arises from this decision of Quess Corp is whether they would break the joint venture with the club as planned earlier and exit after May 31, 2020.
The ‘Joint Venture’ formed by East Bengal and Quess Corp in 2018 had seen the Bengaluru-based taking 70 per cent stake in the new venture that enjoyed the footballing rights to participate in the I-League, which was with the club till then.The new entity had four board members each from Quess and East Bengal club.
But since the beginning of the last season, the company had made it clear that they would not bear any financial liability after May 31, 2020.
The news was confirmed by Quess Corp CEO Subrata Nag in January that they are planning to divest the shares to a third party before leaving.
"QEBFC, as we told, that the 31st of May this year is the last day, our contract with the club terminates. We have no financial liability post that. What we have been trying and that we also in the discussions with a couple of investment bankers to get a suitor so that we can divest. So we will be trying our best to do that.
"Hopefully, we'll get somebody to offload our share. And if nothing happens, but -- 31st May, post that, we have no financial liability. That is the last point," Nag said.
Quess Corp chairman Ajit Issac had publicly stated that the company are looking for an exit strategy from Quess East Bengal before the start of last season. This naturally should have led to discussions on how to go about this in case they fail to find investors between Quess and the club.
What remains to be seen is how the exit plan between Quess and East Bengal plays out now?
They key question is whether Quess decides to hold on to their footballing rights even after May 31, 2020, should they not find an investor. Would they just give up their 70 per cent stake for free to East Bengal Football Club? Or will they demand a certain sum for the rights to be transferred back to the parent football club?
The footballing rights to participate in the I-League is with Quess East Bengal and Quess can opt to not transfer it back to the club in case they feel they are not being compensated for their exit. This would leave East Bengal in a dilemma.
Should East Bengal decide to field a new team under a different name (East Bengal Sports Club or such), then they will have to start off at the bottom rung which is extremely unlikely.
The point to note here is that even if an exit plan is not agreed and Quess East Bengal continues to hold the footballing rights, Quess will not have any financial liability, as Subrata Nag stated clearly in March.
What this effectively means is that the ball is in East Bengal's court and their next move in discussing the exit strategy with Quess is crucial to this saga.