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Help Sun, Astro deny media reports of impropriety in deal
CHENNAI: Sun Direct TV, a part of the Sun Group owned by Kalanithi Maran, and Malyasia's Astro on Tuesday completely denied reports that the foreign firm's purchase of a 20% stake in Sun in 2007 was linked to the grant of licences to cellular firm Aircel, owned by Malaysia-based Maxis.

The Chennai-based DTH services provider said that there was no impropriety in the transaction with Astro and condemned media reports as malicious, derogatory and aimed at tarnishing its image and reputation.

"Sun TV entered into an MoU with the Astro group in January 27, 1997, when Aircel was not in existence, but since the government of India did not allow the use of KU band transponders for DTH services the project was put on hold," the firm said in a statement. After the DTH policy was announced by the government in December 2007, Astro picked up a 20% stake in Sun Direct TV, the stake was valued at approximately $115 million.

A report in a section of the media, including The Economic Times, had said that investigators are probing the transaction between Sun Direct and Astro as part of general probe into the grant of telecom licences from 2001.

The report said that the government granted licences to Aircel and Dishnet Wireless in 2006 while the applications of other companies were still pending. Aircel is owned by Malaysia's Maxis group. Astro All Asia Networks is also owned by Ananda Krishnan, the proprietor of Maxis.

Dayanidhi Maran was the telecom minister when the licences were granted. He is the brother of Kalanidhi Maran, the founder of Sun Direct TV. The Sun TV Network , of which Sun Direct is a part, is owned jointly by the Maran brothers.

The ET report also said that Astro's purchase was done at a premium of 70 per share valuing the company at 3,320 crore at a time when Sun had not started operations and had projected losses of $166 million in the first five years of operations. Kalanidhi Maran and his spouse were also allotted shares by the Sun Direct board but at par, the report said.

"The entire investment made by Astro is transparent and has been done after obtaining permission from foreign investment promotion board, cabinet committee on economic affairs and other regulatory authorities. So, we cannot be linked to the spectrum controversy," the statement said.

The statement said that in 1997 Dayanidhi Maran was neither in politics and nor an MP in 1997 when Sun Direct did the MoU in 1997. He is also not a shareholder in Sun Direct and not connected with the DTH business in any manner, the statement added.

In another statement, Malaysia-based Astro denied that the premium paid to buy Sun Direct shares was excessive, unwarranted and not in line with market conditions. It said that comparisons to Dish TV were unfair and wrong. Dish TV's share price on December 12, 2007, was 93.8, resulting in a valuation of 4,034 crore. The ET report quoted Dish's share price on that day as 61.25.

Astro also said that when it issued a circular to its shareholders on June 7, 2007, Dish TV's share price was 109.3, valuing the company at 5,125 crore.

"It should be noted that from 2003 until June 2010, when it was taken private, Astro was listed on the Kuala Lumpur stock exchange, and the majority of the Board of Directors were independent members.

As a public company whose shareholders comprised prominent entities such as Khazanah Nasional Berhad (Malaysian Government sovereign wealth fund), Usaha Tegas Group, and other local and global financial institutions, all investment decisions followed strict governance procedures," the statement said.

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