 "We haven't received a single notice from any ministry: S L Narayanan")
Ever since news broke that the home ministry has denied security clearance to Kalanithi Maran-owned Sun TV Network’s 33 channels, the company's stock has been on a downward spiral. Around Rs 6,000 crore has been wipe out, of which media tycoon Maran alone suffered a Rs 4,500-crore loss. However, S L Narayanan, group financial officer at Sun Group, tells T E Narasimhan and Gireesh Babu that the issue has not impacted the morale of employees and business is as usual. Edited excerpts:
How do you react to the whole issue?
In my view, the attempt to treat the company and its promoter interchangeably is not correct. Even assuming but not admitting that Maran's actions in the Sun Direct Astro matter are objectionable, why should Sun TV Network — a completely unconnected company - be denied its licence to do business? The fundamental legal principle of “presumed innocent till pronounced guilty” should be honoured. Anything short of that is a gross violation of natural justice.
I can say with total conviction that the shares that were issued to Astro were extremely reasonably priced. There were two publicly available valuation benchmarks that clearly show Sun Direct's pre-money valuation was comparable. Dish TV, which listed in April 2007 and the Tata Sky-Temasek deal of November 2006 will prove our contention beyond a shadow of doubt. More significantly, whatever equity infusions that came from Astro have been completely spent on the DTH project and this evidence is a matter of record.
The charge that the shares were sold at very high premium is completely wrong and the allegation that investment was used as an illegal gratification is unsustainable.
Is it politically motivated?
I have no idea and I prefer not to comment.
Have you presented your case before the home ministry?
We have not got any communication — written or oral — from any ministry; we learn everything from the newspapers.
What kind of impact did it have on the business?
Business is as usual and we are determined to put our best foot forward and do what is good for the company, its employees, its customers and stakeholders.
What is the impact of the reports on the stock price of Sun TV?
Around Rs 6,000 crore has been eroded, of which Rs 4,500 crore is Maran's alone.
How do you react to the whole issue?
In my view, the attempt to treat the company and its promoter interchangeably is not correct. Even assuming but not admitting that Maran's actions in the Sun Direct Astro matter are objectionable, why should Sun TV Network — a completely unconnected company - be denied its licence to do business? The fundamental legal principle of “presumed innocent till pronounced guilty” should be honoured. Anything short of that is a gross violation of natural justice.
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The entire issue is related to Sun Direct. Can you explain how did the deal go through?
I can say with total conviction that the shares that were issued to Astro were extremely reasonably priced. There were two publicly available valuation benchmarks that clearly show Sun Direct's pre-money valuation was comparable. Dish TV, which listed in April 2007 and the Tata Sky-Temasek deal of November 2006 will prove our contention beyond a shadow of doubt. More significantly, whatever equity infusions that came from Astro have been completely spent on the DTH project and this evidence is a matter of record.
The charge that the shares were sold at very high premium is completely wrong and the allegation that investment was used as an illegal gratification is unsustainable.
Is it politically motivated?
I have no idea and I prefer not to comment.
Have you presented your case before the home ministry?
We have not got any communication — written or oral — from any ministry; we learn everything from the newspapers.
What kind of impact did it have on the business?
Business is as usual and we are determined to put our best foot forward and do what is good for the company, its employees, its customers and stakeholders.
What is the impact of the reports on the stock price of Sun TV?
Around Rs 6,000 crore has been eroded, of which Rs 4,500 crore is Maran's alone.