Sun TV cracks 7 per cent, ED files chargesheet against founder

Broadcasting services company Sun TV’s shares cracked 7 per cent intra-day in the early trades on Monday, after the former telecom minister Dayanidhi Maran, his brother, and Sun Group chief Kalanithi Maran along with four others were charge sheeted by the Enforcement Directorate in the Special 2G court in connection with a money laundering case lodged in the Aircel-Maxis deal.

The charge sheet alleged that the proceeds of crime, that were to the tune of Rs 742.58 crore were paid by Mauritius-based companies for Dayanidhi in SDTPL (Sun Direct TV Private Limited) and SAFL(South Asia FM Limited) according to a press note.

Sun TV Network Ltd held 60 per cent stake in SAFL, while AH Multisoft Pvt Ltd and South Asia Multimedia Technologies Ltd, Mauritius, held 20 per cent each. The ED further alleged that the two firms were owned and controlled by Kalanithi and the money was utilized by the companies in their business.

The ED had on April 1, 2015 attached the assets, estimated at Rs 742.05 crore, held by Dayanidhi Maran, and Sun Group Chief Kalanithi Maran in the case. The attached assets include Rs 100 crore of fixed deposits held by Kalanithi Maran; freehold land; and buildings owned by the Sun Network worth Rs 266 crore; in addition to fixed deposits worth Rs 7.47 crore held by his brother.

However, Sun TV Network in a statement to stock exchange clarified that this development is not going to have a direct bearing on the company. But this development does not augur well for the company as the ED charge-sheet may further jeopardize expansion plans of Sun TV and FM. This was very evident in June 2015, when Ministry of Home Affairs had denied security clearance to 33 channels of Sun TV Network. Permission was denied citing promoters alleged involvement in economic wrongdoings. This can have further ramifications on the company’s ability to get security clearance or participate in future FM airwaves auctions.

On the financial front the company has been doing well. Company reported a good set of Q2FY16 numbers. Revenue increased 11.6 per cent to Rs 568 crore in quarter ended September 2015, compared to Rs 509 crore in the last fiscal. Operating profit was up 9.3 per cent. However, margins contracted by 170 basis points on a yearly basis. Profits shot up by 41.4 per cent Y-O-Y.

The promoters holding in the company stood at 75 per cent, while Institutions and Non-Institutions held 19.25 per cent and 5.75 per cent respectively.