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Malaysia’s media and entertainment company Astro All Asia Networks Ltd has told the Central Bureau of Investigation that it paid a lower value to buy a stake in Sun Direct TV Pvt Ltd compared with the valuation arrived at by investment banker JP Morgan.
In a letter to CBI Director Ranjeet Sinha, sent on September 25, Astro said while JP Morgan had set the value of Sun Direct in 2007 in the range of Rs 2,610-3,380 crore, Astro paid Rs 549 crore for a 20 per cent stake in Sun Direct, pegging the enterprise value at Rs 2,196 crore.
Denying allegations that it paid a premium to buy a stake in Sun Dircet, Astro said the decision to buy a stake in Sun Direct was a commercial one. Citing past court rulings, Astro said commercial decisions cannot be questioned without any specific restriction imposed by any law and the same cannot be held as a sham transaction.
Astro’s letter assumes significance in the light of the investigations being carried out by the CBI against former Telecom Minister Dayanidhi Maran in the Aircel-Maxis case. Former owner of Aircel C. Sivasankaran has alleged that Maran coerced him into selling the stake in Aircel in 2006 to Maxis Group, owned by Kuala Lumpur-based business tycoon T. Ananda Krishnan. It is also alleged that Maxis made a quid pro quo investment in Sun Direct TV, owned by Dayanidhi’s brother, Kalanidhi Maran, through Astro. The CBI is investigating whether Astro had to pay a premium to buy the stake in Sun Direct. The investigating agency is expected to file a chargesheet in the case soon.
Astro said that JP Morgan had carried out an independent valuation at its request. Explaining the process for fixing the valuation, Astro said in the letter that JP Morgan had arrived at a higher valuation on the basis of the business plan, internal financial analysis and publicly available information.
“Astro’s internal discounted cash flow analysis indicted a valuation for Sun Direct as Rs 3,074 crore. The final amount paid by Astro of Rs 549 crore for its 20 per cent stake in Sun Direct implied a valuation of Sun Direct of Rs 2,198 crore which is much lower than the valuation arrived at by JP Morgan,” it said in the letter to the CBI.
This is second letter from Astro to the CBI over the last two months. The company wrote to the CBI on August 30 saying it followed an RBI-recommended methodology to invest in Sun Direct.
> thomas.thomas@thehindu.co.in
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