Sun TV responds: All allegations are baseless

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Sun TV responds: All allegations are baseless
Sun TV Network: Quotes, News
BSE 532.85BSE Quote0.85 (0.16%)
NSE 534.10NSE Quote2.3 (0.43%)
Following the crash of share prices of Sun TV Network, the company has informed the Bombay Stock Exchange with its official response to the media reports.

It has stated "Sun TV denies the baseless allegations and rumors leading to abnormal volatility in share prices."

The company's share price fell by approximately 30 per cent yesterday after there were news, that the company was involved in the 2G scam.

The network in its press release said, "We wish to inform that Sun TV Network Limited and Mr. Kalanithi Maran do not have any relationship whatsoever to any of these happenings."

Sun TV Network denied officially the allegation of usage of 323 lines of BSNL. It was stated in the media that 323 lines of BSNL lines for Sun TV Network was being routed through the residence of Dayanidhi Maran.

The company also stated that Dayanidhi Maran does not own any shares either in Sun TV Network or in Sun Direct TV. 

Also the press release stated that there were no cross-holding of shares between the two entities -- Sun TV Network and Sun Direct TV. As a broadcaster, in its natural course of business, Sun TV offers its channels to all the DIII players like Dish, Tata Sky including Sun Direct.

In its recent results, FY11, the company's consolidated revenues grew by 39% to Rs 2,013 crore and advertisement revenues went up by 25% to Rs 1,053 crore. The company's EBITDA for the said period was Rs 1,578 crore. The consolidated PAT was of Rs 770 crore. Sun TV Networks announced a dividend of 175 % being Rs 8.75 per share on a face value of Rs 5 per share for FY11.

Kalanithi Maran owns 77% of the company,  of this Maran has pledged 17.12%. When calculated as to what part of the total shares is pledged, the asnwer is 13.18%.  

View: The company is correct when it states that the family mmebers do not own any shares in the company. But there is no way of confirming or denying that future profits were not guaranteed for favours by the minister. Besides none of this will not change the fact that the promoter and chairman of the company were siblings, so all grants to the company by the minister will have face the prospect of ethical and moral screening.

On the investment front, the company stock will be very volatile, this will open opportunities for day-traders and short-term investors. 

OneIndia Money

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