Madras High Court relief for Sun TV a temporary reprieve

The Madras High Court's decision to allow Sun TV Network to participate in the upcoming Phase III auction of FM Radio licences is a shot in the arm for the embattled company, but it is still only a temporary reprieve.

With its promoters facing a slew of charges, Sun TV still has a long battle on its hands.

The embattled Chennai-headquartered Sun Group runs 33 television channels and 48 FM channels. Earlier the Union Home Ministry had not given security clearance to the group, which meant they could not bid in the upcoming auction. But the Madras High Court's decision changes that situation to the company's benefit.

The Kalanithi Maran-led Sun Group has been facing various charges including action from the Enforcement Directorate and has been accused of money laundering, all of which the group denies. Kalanithi's brother and former union minister Dayanidhi Maran has also been facing a spate of charges.

So much has been the pressure that the group took the unusual step of issuing a communiqu under the normally low profile Kalanithi's name, when news reports suggested that a Delhi court had issued summons in two tax evasion cases and alleged failure to deposit over Rs 147 crores TDS with Income Tax department on behalf of SpiceJet, which the group owned earlier and subsequently sold to Ajay Singh.

The statement quoted Kalanithi as saying: "The companies of the Sun Group collectively and me in my personal capacity pay more than Rs 600 crore as taxes annually to the national exchequer. There have been several occasions when tax authorities have awarded trophies and honored Sun TV Network Ltd with citations for exemplary compliance and for topping the region in terms of highest tax payments. We are not tax dodgers."

The communique went on to claim that SpiceJet was the only group company that had difficulty in making timely payments in 2014, which it attributed to "challenging times faced by the entire airline industry." It also said that all dues had been cleared by February 2015, well before the new promoter took over.

The markets, though, interpreted the Madras HC order favourably, with Sun TV's shares going up by 6 per cent on Thursday on the Bombay Stock Exchange. Business Today did a deep analysis of Sun Group's problems and an exhaustive interview with Group CFO S.L. Narayanan in a recent story. Read them at bit.ly/1IdZszw and ow.ly/PYKND, respectively.