Shares of Sun TV Network Ltd closed over one percent lower on Friday, June 20, as a feud erupted between the Maran brothers over the shareholding of the media network. However, it is to be noted that the shares have significantly recovered their losses after falling as low as 4.4% earlier on June 20 due to a clarification issued by the company.
Moneycontrol reported that the former Union Minister and DMK MP Dayanidhi Maran sent a legal notice to his brother Kalanithi Maran. The notice alleges that Kalanithi, chairman of the Chennai-based media conglomerate and Dayanidhi’s billionaire brother, engaged in what it describes as “fraudulent practices,” including “cheating and money laundering."
It demands the restoration of Sun TV Network's shareholding to the original structure established in 2003, invoking the legacy of their late father, SN Maran (better known as Murasoli Maran) and MK Dayalu, wife of former Tamil Nadu Chief Minister M Karunanidhi.
However, Sun TV Network informed exchanges that reports of the feud between its promoters, the Maran family are a personal matter and don't have an impact on the business of the company or its day-to-day functioning.
"The matters alleged in the articles do not have any bearing on the business of the Company or its day-to-day functioning and being the family matter of the Promoter are purely personal in nature," the company said.
At close, shares of the stock were quoting Rs 605.75, down 1.05 percent on the NSE, compared to the previous session's closing price.
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The notice alleges that after their father died in 2003, shares were transferred to their mother Mallika Maran without proper legal documents like a death certificate or legal heir certificate, which were issued only days or months later. This transfer was done to allegedly help move shares later to Kalanithi Maran.
The notice alleges that Kalanithi allotted 12 lakh equity shares to himself at Rs 10 each on 15 September 2003, an “illegal act of criminal breach of trust and cheating.” This when, the value of shares then was between Rs 2,500-Rs 3,000 as per the notice.
At that time, the company was financially strong and did not need to raise money, so there was no reason to issue these shares, the notice alleges. Before this, Kalanithi did not own any shares, but after this move, he became the majority owner, reducing the original families’ shares from 50 percent each to just 20 percent, per the notice.
The notice also alleged that Sun TV misled its stakeholders in its Red Herring Prospectus filed in 2006. The RHP said that a sum of Rs 10.64 crores had been paid by way of dividend to Mallika Maran as of December 31, 2005. However, no such amount was paid to her through the dividend route. "You have falsely declared information in the Red Herring Prospectus, thereby deceiving the general public”, the notice said.
Kalanithi Maran currently owns 75 percent in the listed Sun TV network and is one of India’s richest businessmen, with a net worth of $2.9 billion.
Over the past year, shares of Sun TV have seen a lackluster performance on the bourses, tumbling over 21 percent. The firm's market-capitalization is around Rs 24,000 crore, while the 52-week high of the stock is Rs 921, and the 52-week low of the shares are Rs 549.3 apiece.
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