June 08, 2015 15:43 IST

With the home ministry rejecting the renewal of broadcast licences to Sun group, is it end of the road for Maran brothers? R Ramasubramanian reports from Chennai.

It’s black Monday for the media moguls of South India, Kalanithi and Dayanidhi Maran. The shares of their Sun Television Network plummeted by 28 per cent within minutes of trading starting at the Bombay Stock Exchange on the very first day of the week. This happened as news broke out that the Union ministry for home affairs has rejected a proposal from the ministry of information and broadcasting recommending the renewal of licences to 33 TV channels owned by media baron Kalanidhi Maran, elder brother of former Union minister for telecom Dayanidhi Maran. With this, the fate of the TV channels and FM stations under the umbrella brand hangs in balance. Though a final decision was yet to be taken in the matter, this was enough to send shivers down the spine of shareholders.

Sources say the I&B ministry was informed by the MHA that three pending cases were instrumental for the decision. One is the Aircel-Maxis deal handled by the Central Bureau of Investigation. The second is the Enforcement Director filing a fresh case as a fallout of the Aircel-Maxis deal and attaching properties worth Rs 742.48 crores belonging to the Marans. In addition, the CBI was also investigating another case relating to the alleged use of 322 BSNL high speed lines by Sun TV when Maran was Union telecom minister.

Though there was no word from the Sun group in the matter, legal circles say it’s highly unlikely that the channels will go off the air as possibilities are very high for an immediate legal remedy. In fact, the Madras high court came to the group’s rescue after its cable business was denied permission by the Union government, when last September a single judge of the Madras high court stayed the decision to cancel the licence to Kal cables operated by companies controlled by the Marans.

“This time, the situation has not reached that point, but we are ready to face any eventuality. We will go to the courts if need be and we are not rattled as the available legal remedies are very bright and encouraging,” a senior executive of the Sun group told Rediff.com on condition of anonymity.

But stock analysts are not so confident and have plenty of words of caution. “This is definitely a difficult situation for the Marans. If the government goes in for appeal in the Kal cables case and takes up the cancellation of TV and radio licences to the Supreme Court, there are chances the high court order could get reversed. If the government is not ready to allow these companies under the present promoters but allows a new set of promoters, then there is a possibility for the companies to survive. If the choice is between losing their business and salvaging the value of their franchise, being very shrewd business people the Marans will choose the latter -- the latest classic example of this is Spicejet,” says Chennai-based investor and stock market analyst Shyam Sekhar.

Troubles for the Marans started gaining momentum when the CBI filed a chargesheet against both the brothers, Malaysian business tycoons Anathakrishanan, Ralph Marsh and a couple of others in the Aircel-Maxis deal on August 29, 2014, in the CBI special court of Judge O P Saini, handling the 2G cases in New Delhi. Though nearly 10 months had passed, there has been very little movement in the case. The Marans appeared in court in the first week of March to file their bail pleas. After another hearing that month, judge Saini adjourned the case to August 2.

The main reason for such a long adjournment is the CBI has not been able to serve the summons to Ananthakrishnan and Ralph Marsh, who are supposed to be in Malaysia. In the meanwhile, the CBI arrested three staffers of the Sun group in Chennai this January in the telephone exchange case, and they were released after spending some time in prison. This case also did not move even an inch beyond that. This April the ED attached properties worth Rs 742.48 crores belonging to both the Marans.

The MHA’s decision is based on the concept of economic security and integrity. But observers also point out that a turf war between MHA and I&B ministry has played out in full in this matter. Arun Jaitley, as information minister, is reported to be soft towards the Marans which is why in spite of repeated communiqués from the MHA, his ministry has been recommending the renewal of licences to the Marans. But Home Minister Rajnath Singh is unperturbed, it is said.

This adverse decision could not have come at a more inappropriate time for the Marans. They are already reeling from several problems. Their current troubles started when the Dravida Munnetra Kazhagam lost power in Tamil Nadu in May 2011. Then one after another its senior executives were arrested on sex assault charges on the basis of complaints filed by the group’s women staffers.

The Marans built the Sun group on the guidance of their late father and former Union minister Murasoli Maran, a nephew of DMK president M Karunanidhi, in the late ’90s. However, their bad times started when Dinakaran, a Tamil daily owned by them, published a survey in May 2007 that Karunanidhi’s younger son MK Stalin was preferred by DMK cadres as their heir apparent, with Karunanidhi’s elder son MK Alagiri and daughter Kanimozhi enjoying less than two pc popularity. This led to the burning down of Dinakaran office in Madurai in which three of its staffers were charred to death. Alagiri’s supporters were widely believed to have been behind the violence and this incident completely redrew the power map within the DMK’s first family, and it also paved the way for the political entry of both Alagiri and Kanimozhi. The Marans were thrown out of power structures for one and a half years and on December 1, 2008, in the run-up to the 2009 Lok Sabha elections, the family got reunited and Dayanidhi Maran became Union textiles minister in the second UPA government.

However, he was forced to resign a month after the arrest of Kanimozhi in the 2G case and in the wake of the Aircel-Maxis deal issue and subsequently the CBI filed FIRs against both the brothers.

Today the Marans are facing tough times. They have to face a hostile government not only in the state but also at the Centre. Along with the fate of the Marans that of over 4,000 employees belonging to the Sun group also hangs in balance. There may not be any immediate danger to their livelihood, but if these cases are taken to their logical conclusion then there may be hard times ahead not only for the Marans and their employees but also for the DMK, because it had in the past depended a lot on the brothers.

At a time when a resurgent Jayalalithaa is threatening an already weakening DMK, Monday’s development is surely more bad news for the party.