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Paradise Papers: Kalanithi Maran’s company was set to get Rs 563 crore when CBI moved in

In the share subscription agreement signed by the companies, as well as in the FIPB application, NDTV News Limited is listed as a shareholder/signatory.

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On February 2, 2017, the Special CBI Court in New Delhi discharged all accused in the Aircel-Maxis case, stating that there was no documentary evidence to substantiate allegations and oral submissions. The 424-page order of judge O P Saini and hundreds of more pages of submissions, clarifications and internal company documents now form part of Appleby records since Astro, the Malaysian company implicated in the case, sought its legal advice during the six-year-long course of the case.

Dayanidhi Maran was Telecom Minister in the UPA government. The principal allegation of the CBI was that the $122 million that a subsidiary company of Astro paid for taking a 20% stake in a company of Dayanidhi’s brother, Kalanithi Maran, was quid pro quo for the purchase of stake by another Astro-linked company, Maxis, in Aircel Televentures Ltd, another telecom firm.

According to the FIR, T Ananda Krishnan is the common promoter of Astro All Asia Networks as well as Maxis Communications. Also, it stated, a company Usaha Tegas, a Malaysian investment company, of which Ananda Krishnan is chairman has substantial shares in both the companies and Ralph Marshall is director in all three firms.

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However, countering these allegations, the court ruling stated that “perception or suspicion are not enough for criminal prosecution… the perception or suspicion is required to be investigated and supported by legally admissible evidence, which is wholly lacking in this case”.

The case collapsed in court two years after the Enforcement Directorate (ED) had attached properties and assets of the Marans valued at Rs 742 crore.

Appleby documents reveal behind-the-scenes transactions. Records show that Appleby prepared a document on May 22, 2012, when Astro was anticipating that a Letter Rogatory would be filed by the CBI to Malaysia government. The Appleby document dated April 22, 2015 states that they “have been instructed by directors of South Asia Entertainment Holdings Ltd to carry out a due diligence on the investments made by the latter in Sun Direct TV and confirm that the investments are made in accordance with the laws of Mauritius”.


The Due Diligence report prepared by Appleby mentions that the investments into Sun Direct were to the tune of $166 million and were made for downstream investment opportunities in the pay TV market in India.

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This document explains the structure for Astro’s investment via Astro Overseas Limited (AOL), a company incorporated in Bermuda, and registered as a foreign company in Malaysia. AOL, in turn, wholly owns South Asia Entertainment Holdings Limited (SAEHL), which is also incorporated in Mauritius and was the signatory for the joint venture which subscribed for 20% of shares in Sun Direct.

The CBI, in its FIR, alleged that Astro’s initial $122 million investment in Sun Direct in 2007 was not genuine and constituted an “illegal gratification” paid to benefit Dayanidhi Maran in return for the then Union Minister allegedly coercing Aircel’s Sivasankaran into selling his stake in the telecom firm to Maxis.


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What is revealing is the fact that in the share subscription agreement signed by the companies (dated January 10, 2008) as well as in the FIPB application, NDTV News Limited is listed as a shareholder/signatory. NDTV is shown to have a 1.09% stake in the company in the share subscription agreement but a 2.39% shareholding when the company applies for a 20% FDI investment.

The shareholding of the other partners is listed as the follows: Sun holds the majority stake of 86.85%; Kalanithi Maran himself 0.32%; a company by the name of A H Multisoft 11.74%. It is NDTV’s corporate office address in the Okhla Industrial Area, which is given in the documents.

Incidentally, Appleby data also contains correspondence between Astro’s top management and the CBI, and the exchanges begin shortly after the agency filed its FIR in the case on October 9, 2011. The role of Appleby in the correspondence is evident. In one exchange dated May 22, 2012, it elaborates how — in view of queries sent by the CBI — there was need to hold urgent board meetings of the Astro companies involved and that Appleby representatives should be present at the Board meeting.

In fact, the first in the bunch of letters written by Astro officials to the CBI is by its then chairman Haji Badri Masri — it is also marked to then CBI director AP Singh — in which he distances himself from the allegations, categorising their investments in India as “legitimate commercial and business transactions”.

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In another communication, dated March 21, 2012, to the then CBI director, the then Astro chairman boasts about how their investment in Sun Direct was one of the largest FDI inflows in India in the DTH sector. Masri adds that in May 2011, Astro was in the final stages of making a further investment of $125 million in Sun Direct in order to increase their stake from 20% to 35%. He adds: “Astro has in fact restrained itself in undertaking further financial and business commitment on account of the ongoing investigations and the consequent uncertainty.”

Response from NDTV:

In order to understand NDTV’s entry into FM radio in the right perspective, it is firstly important to recognise that NDTV News invested into radio companies as early as 2005, well before Sun TV/ Kalanithi Maran entered into the radio business. Secondly, NDTV News only entered as a minority shareholder as the main aim was to produce and broadcast independent and credible news on FM radio if and when it would be permitted under the regulations. Thirdly, it is important to recognise that with the aim of doing news on radio in mind, NDTV News was always a minority shareholder, NDTV News’ shareholding was less than 3%. Fourthly, NDTV News exited the radio companies in 2009, much before CBI commenced enquiry into Astro, etc. Finally, every step that NDTV News took was declared publicly to all the relevant authorities and was 100% kosher in every respect.


The foray into the radio news business in 2005 by the NDTV group was a natural progression. At that point of time, the NDTV group was contemplating entering into space of airing news and current affairs programmes on radio in anticipation of policy changes permitting radio companies to enter into news business. It is factually correct that NDTV News gave a loan of Rs 8.26 crore. This loan was pursuant to shareholder’s obligation in which the shareholders of SAFL were to contribute to the funding requirement either through equity participation or through loan in proportion to their shareholding in SAFL. There was no ‘acquisition’ of 33.89 lakhs shares by NDTV News in SAFL, the existing loan was converted into 33.89 lakhs shares.

It is incorrect to say that NDTV News dealt directly with Kalanithi Maran or Sun TV. NDTV News entered into the radio business much before Kalanithi Maran and Sun TV entered the radio business, as it offered a business case to allow for NDTV’s news content to reach a wider audience as and when news and current affairs content production by private companies was allowed for radio broadcast.


Subsequently, a consortium of Astro and Arjun Rao group (promoters of Value Labs), who were the majority shareholders in the radio business, wanted to scale its existing radio business by partnering with Sun TV and Kalanith Maran for a pan-India radio business, NDTV News as a small minority shareholder entered into the aforesaid agreement because the majority shareholders wanted to do so. Further, note that the agreements were entered into with Sun TV and Kalanithi Maran who was not a politician — Kalanithi Maran was an established businessman with an expansive, diversified media business across India.

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When the majority shareholders of SAFL — a consortium of Arjun Rao group (promoters of Value Labs) and Astro entered into an understanding to be a part of larger pan-India radio business, NDTV News perforce had to also do the same, being a minority shareholder. Once again, note that NDTV kept a small stake in this radio business solely because the agreement gave NDTV the first right to do independent news on FM radio stations if and when the government allowed news on private FM radio.

Also, all these agreements were made after making complete disclosures and therefore, to imply that there was something unethical about having a timely stake in the radio business seems to be an effort to tarnish NDTV’s reputation for no reason. In any event, the government did not permit radio companies to enter into news business and therefore, NDTV News exited the radio companies in 2009. As regards your question of disclosure of this investment in income tax computation, as per every professional and our understanding of income tax laws, investments made are capital in nature does not enter income tax computations. NDTV News filed its annual tax returns, fully as per law.

Please note that NDTV News exited agreement and was no longer part of the FM radio company long before there was any CBI enquiry into Sun TV-Astro which makes it clear that NDTV’s exit and the CBI enquiry had no connection at all. The cost of radio business in India was demanding — cost of music library licenses and annual radio license costs and other financial demands of the radio business in India, required significant funding. Most importantly, with uncertainty around any change in the radio policy concerning airing of news & current affairs content by private radio broadcasters and the funding requirements of the SAFL radio business, a commercial decision was taken in ordinary course to exit in 2009.

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First published on: 07-11-2017 at 01:40:45 am
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