Sun TV Network share price crashes 5% as legal battle emerges between brothers Dayanidhi & Kalanithi Maran over company

Shares of Sun TV Network crashed over 5% in early trade on Friday after a family feud came to light between brothers Dayanidhi Maran and Kalanithi Maran, with Dayanidhi accusing Kalanithi of taking control of the ₹23,000 crore company through fraudulent practices.

The legal battle has put the investors of Sun TV Network on edge, driving the stock lower in trade today.

Dayanidhi vs Kalanithi Maran: What's behind the dispute?

Dayanidhi, who is a member of Parliament from the Dravida Munnetra Kazhagam (DMK), has sent a legal notice to Kalanithi Maran and several others of "fraudulent practices" and "misgovernance" in taking control of Sun TV after their father Murasoli Maran's death in 2003. Dayanidhi also seeks to restore the company’s shareholding structure to its pre-September 2003 status.

This implies that Dayanidhi and his sister, Anbukarasi Maran, along with the current chief minister of Tamil Nadu, M.K. Stalin, and his two brothers and sister, would be the owners of Sun TV, as Kalanithi did not own any shares in the company 22 years ago, according to a Mint report.

Dayanidhi says that after their father's death, Kalanithi—who didn’t own any shares back then—took over more than 75% of the company, while the shares held by their parents were reduced from 50% to just one single share. He claims Kalanithi used none of his own money to do this.

He has threatened to request a government investigation by the Serious Fraud Investigation Office (SFIO) if Kalanithi does not agree to fix the issue.

The legal notice, dated 10 June, was sent by Dayanidhi’s lawyer K. Suresh to Kalanithi and seven others, including: Kalanithi’s wife Kaveri Kalanithi, Sun TV’s compliance officer Ravi Ramamoorthy, two chartered accountants, and Other senior finance staff at Sun TV.

The notice says that when Sun TV was founded in 1985, the only shareholders were M.K. Dayalu (Karunanidhi’s second wife) and Mallika Maran (Murasoli Maran’s wife). Today, Kalanithi owns 75% of Sun TV, which is now worth around ₹24,356 crore. His personal net worth is estimated at $2.9 billion, according to Forbes.

Dayanidhi alleges that Kalanithi and Kaveri took advantage of the family’s emotional state during their father’s illness and death, and began their first illegal act in September 2003. He says they secretly and intentionally manipulated company records, pretending to buy shares at ₹10 each, even though the real value was much higher.

He calls this a planned and dishonest scheme to push other family members out and take total control of the company.

Sun TV claims to be the country's largest listed media conglomerate, with 37 TV channels, 69 radio stations, and three daily newspapers, including the Tamil daily Dinakaran. Its film division Sun Pictures owns the SunRisers Hyderabad team in the Indian Premier League.

Sun TV issues clarification

However, Sun TV has dismissed the various media reports, stating “statements allegedly made in the articles are incorrect, misleading, speculating, defamatory and not supported by facts or law.”

The company added that the matter dates back 22 years, when Sun TV was a closely held private limited company. “We wish to inform that all acts have been done in accordance with legal obligations and the same had been duly vetted by concerned intermediaries before the public issue of the Company,” Sun TV said.

It further clarified that the matters alleged in the articles do not have any bearing on the business of the company or its day-to-day functioning, and being the family matter of the promoter, are purely personal in nature.

Sun TV share price trend

Against this backdrop, Sun TV Network share price crashed 5.2% to ₹581.55 on the BSE. The mid-cap company's stock has performed poorly in the recent past, with the stock losing 23% of its value in a year, 14% year-to-date, and 5% in three months.

As of 11.05 am, Sun TV Network stock was down 3.65% at ₹591.10.

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