Fraud, cheating, money laundering: A look at the key charges levelled by Dayanidhi Maran against Sun TV chairman Kalanithi Maran

Subsequently following a fresh allotment in 2002, SN Maran held 95,000 shares and Mallika Maran owned 20,000 shares. In 2003, Kalanithi allotted himself 12 lakh new shares of Sun TV at face value of Rs 10 per share allegedly without consent of major shareholders: SN Maran and Mallika Maran.

This allotment changed the shareholder dynamic in the company with Kalanithi owning 60 percent stake. Apart from the direct stake, since Kalandhi along with his two sibling was legal heirs, he was also entitled to a portion of his parent’s shareholding via succession.

Also Read : Sun TV on Maran brothers' feud: Matters personal, do not impact company

Under-valuation of shares: The notice also alleges that the 2003 allotment of shares to Kalanithi Maran were done at face value of Rs 10 each although fair value of the said shares was anywhere between Rs 2,500 and Rs 3,000 at that time. In other words, Kalanithi paid only Rs 1.2 crore for the shares compared to their market value of around Rs 3,500 crore at that time.

Just a year and a half after the allotment, in 2005, Kalanithi bought shares from MK Dayalu at Rs 3,173 apiece, suggesting massive undervaluation of the stock. Such undervaluation adversely impacts the company, as it receives far less money for the shares compared to their fair value. Undervaluation of this nature is also illegal under both company and tax laws.

Spice Jet, SRH and other Kalanithi ventures built on illegitimate proceeds: Dayanidhi has also alleged that the Kalanithi side of the family used the illegal dividends it received from Sun TV to get into other business ventures including SpiceJet and Sunrises Hyderabad (SRH). Dayanidhi has said he will approach both the Director General of Civil Aviation (DGCA) and the Board of Cricket Control In India (BCCI) to suspend the licenses given to both the Kalanithi ventures.

Misleading public investors and role of investment banks: Dayanidhi has alleged these fraudulent financial transactions were not fully disclosed in the Initial Public Offering(IPO). He further alleged, lead manager of the issue: Kotak Mahindra and DSP Merril Lynch acted in connivance with Kalanithi and did not conduct a proper due diligence into the company especially pertaining to transactions involving large chunks of shareholding transfer.

He added if proper due diligence had been conducted by bankers, questions regarding the disparity in share valuation would have surfaced. Sebi rules mandate companies to fairly disclose all such transactions in the offer document and hence Dayanidhi has alleged Kalanithi has violated Sebi rules.

Cover-up: Following Dayanidhi Maran's first legal notice to his brother Kalanithi Maran in October 2024, Kalanithi allegedly paid Rs 500 crore to their sister, Anbukarasi, routed through their mother Mallika Maran’s bank account. Dayanidhi has alleged that this payment amounts to an admission of wrongdoing and was intended to conceal the crime. He further claimed that Kalanithi used funds obtained from Sun TV dividends for the transaction. Since Kalanithi’s shareholding in Sun TV was allegedly acquired through illegal allotments, the dividends he received were also proceeds of crime, Dayanidhi alleged.

Role of fiduciaries: Dayanidhi has also included the auditor, company secretary and the financial consultant of the company in the list of accused. It has been alleged that these fiduciaries worked at the behest of Kalanithi to mask the alleged fraud. Regulations pertaining to chartered accountants and company secretaries requires them to act impartially and transparently.