A fair bit of uncertainty has cropped up around the joint venture between Quess and East Bengal that is set to end by May 31, 2020.
East Bengal had entered into a joint venture with Bengaluru-based company Quess Corp in 2018 to run their footballing activities. Quess Corp, who came in as an investor, owned 70 per cent of the venture while East Bengal club had the remaining 30 per cent.
But the investors, before the start of the last season, had informed that they would come out of the agreement after the 2019-20 season ended. They had decided to end their association after May 31, 2020.
Quess Corp CEO Subrata Nag had also suggested that the company were planning to divest their shares to a third and in case that did not happen before May 31, they would not have any financial liability.
However, there is no exit strategy agreed between Quess and the club right now, something which has posed a question mark on the future of the existing players contracted to Quess East Bengal.
When Quess came onboard, a new entity named ‘Quess East Bengal’ was formed with four members from Quess and East Bengal being the board of directors. It must be noted that back then Quess East Bengal issued fresh contracts to all the players who had an existing agreement with East Bengal club.
Also Quess East Bengal had to undergo a transfer ban after their takeover because East Bengal club had erred in their signing of Minerva Punjab’s Sukhdev Singh.
The point to note here is that would the players who are on multiple year contracts with Quess East Bengal be left without a club altogether? Not really, as 30 per cent stake is with East Bengal club and by default, the players would be under East Bengal.
Essentially what would transpire is that Quess, an investor, would either exit or not have any financial liability, and the onus would fall on the club instead. Should any of these players seek a legal opinion, they are sufficiently covered.
It must also be questioned as to why Quess East Bengal signed players on multiple year contracts when it was in public knowledge that Quess would part ways or rather bear no financial liability after May 31, 2020.
Did East Bengal club and Quess discuss about their strategy as to who would bear the expense of wages after May 31st?
For all concerned parties, Quess is just an investor and the club continues to exist even after their exit. The onus would fall on the club to continue to pay the expenses towards salaries to players. It must be noted that when Quess came on board, they had committed to cover the finances of running the club. Now with Quess deciding not to pump in any more money, East Bengal have to find the funds.
In case Quess and East Bengal come to an agreement, jointly dissolving the venture, the contracts with Quess East Bengal along with the footballing rights will come to East Bengal as the parent body.
Quess has already activated the ‘Force Majeure’ clause in the wake of the Coronavirus crisis and have terminated the contracts of the current set players from May 1 which means the players will not be receiving their salaries for the month of May.