Sun TV shareholding: Dayanidhi accuses Kalanithi of fraud since 2003

Lok Sabha Member of Parliament and former Union Minister Dayanidhi Maran has issued a legal notice to his elder brother and Sun Group Chairman Kalanithi Maran, alleging large-scale fraud in the allotment and transfer of shares in Sun TV Network and affiliated companies.

The notice accuses Kalanithi Maran and seven others of orchestrating a series of fraudulent transactions beginning in 2003 to obtain a controlling interest in Sun TV. The alleged acts include illegal allotment of shares, manipulation of company records, undervaluation of share transfers and misuse of company funds.

According to the notice, Kalanithi Maran was allotted 12 lakh equity shares on September 15, 2003 - days after their father SN Maran was brought back to India in a critical condition - without proper valuation, shareholder approval, or consent of the original promoters. These shares, allegedly allotted at face value of ₹10 each, represented a 60% stake in the company. The actual value of the shares at the time, the notice claims, was over ₹3,000 each.

Dayanidhi Maran alleges that his father's shareholding in Sun TV and related entities was illegally transmitted to their mother, Mallika Maran, on November 26, 2003, prior to the issuance of a death certificate and legal heirship certificate. This transmission, the notice contends, facilitated further unauthorised transfers of shares to Kalanithi Maran in December 2005 at values far below market rate.

The notice further alleges that:

• Kalanithi Maran declared a dividend of ₹174 crore in 2005 and used these funds to buy out the 50% stake held by MK Dayalu, wife of the former Chief Minister M Karunanidhi, in Sun TV-affiliated companies.

• Dividends and share allotments were used to enrich select individuals, including his wife Kaveri Kalanithi (currently Joint Managing Director of Sun TV) and associates who were rewarded with senior roles in group entities such as SpiceJet and Sun Direct.

• Several professionals - including the company’s auditor, financial consultant and company secretary - actively assisted in executing the transactions and concealing the alleged irregularities.

“You are hereby called upon to forthwith restore the entire shareholding position... to their original state as it stood on 15.09.2003,” the notice states, calling for reversal of share allotments and repayment of dividends and other financial benefits to the legal heirs of SN Maran and MK Dayalu.

The notice threatens legal action under various provisions of the Indian Penal Code, Companies Act, SEBI Act and Prevention of Money Laundering Act. Dayanidhi Maran has stated that he will approach the Serious Fraud Investigation Office (SFIO), Enforcement Directorate (ED), Registrar of Companies, SEBI, and other regulatory bodies seeking a full probe.

He also intends to seek cancellation of broadcasting, publishing and aviation licences held by entities owned or controlled by Kalanithi Maran, including Sun TV channels, Sunrisers Hyderabad (IPL team), Sunrisers Eastern Cape (South Africa) and SpiceJet.

"This demand is to be fully complied with within seven (7) days from the date of receipt of this communication, failing which my client shall be constrained to initiate all appropriate civil, criminal, regulatory, and enforcement proceedings against you and your associates without any further notice, holding each of you personally and jointly liable under applicable laws," the notice states.