Bengaluru-based business service provider, Quess Corp, have signalled their intention to conclusively end their association with I-League side East Bengal by the end of May.
The Kolkata club had entered into a Joint Venture with the Bengaluru-based company in 2018 to run their footballing activities. Quess Corp, who came in as an investor, owns 70 per cent of the new entity Quess East Bengal FC while East Bengal club had the remaining 30 per cent.
On May 28, Quess held their Q4 2020 earnings conference call which was attended by Ajit Issac (Chairman and Managing Director), Krishna Suraj Moraje (Group CEO & Executive Director) and other top officials.
During the meeting, Moraje stated, "We will conclude the termination of our partnership with QEBFC as of end of May, and we will make sure there are no further liability on that front."
Goal had reported earlier that Quess was looking to divest shares of East Bengal to minimise losses and strike an early exit.
"QEBFC, as we told, that the 31st May of this year is the last day, our contract with the club terminates. We have no financial liability post that. But meanwhile 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," stated Subrata Nag, the former Group CEO, during Quess' Q3 earnings conference call held on January 30.
But neither Moraje nor Issac have mentioned finding an investor or a sponsor to take up the shares. Instead, they echoed their sentiments of exiting the partnership to limit liability.
It is important to note that the footballing rights to play in the I-League is with the joint venture. Whether Quess gives up that right to play in the I-League for any compensation from the club or not is still not clear.
The Bengaluru-based Quess has incurred losses of around INR 3-4 crores during the third quarter of the ongoing financial year in spite of seeing an increase in sponsorship revenue.
"So there are some sponsorship revenue that just kicked in, but most of the things will come when the season starts and the ticket sales and other things. And overall loss, I think, this quarter, which is just not much. I think it is around between INR 2 crores to INR 3 crores to INR 4 crores in that range. (Maybe) INR 3 crores to INR 4 crores," informed Nag previously.
