Shares of Sun TV Network crashed 25 per cent on Monday on reports that the broadcasting major may not get renewal licence to air 33 channels after the Ministry of Home Affairs has reportedly declined to give security clearance to the company.

After touching a low of Rs 250 in early trade on the BSE, the stock ended at Rs 278.90, down 21.73 per cent.

On the the F&O too, the counter crashed 19 per cent, while open interest jumped 77 per cent to 27.79 lakh shares on the NSE.

Security clearance

The company had applied for a 10-year renewal of security clearance for all its 33 channels last year.

Media reports have it that the Home Ministry struck down a proposal by the Information and Broadcasting Ministry for giving security clearance citing pending criminal cases against Kalanithi Maran and his brother and former Union Minister Dayanidhi Maran.

It is said that the Ministry of Home Affairs had communicated to the Information and Broadcasting Ministry on Friday that the former declined security clearance to the company and hence its broadcasting licence may be revoked.

However, S L Narayanan, Chief Financial officer of the Sun TV Group, has said there is no official communication on this yet from anyone.

Earlier, the Home Ministry had denied security clearance for the Sun Group's 40 FM radio stations when the company applied for licence renewals early this year. Following this, the company moved the Madras High Court seeking interim relief in this matter, and the court has granted a stay.

There are three pending cases against the Sun TV Group and its owners - CBI's Aircel-Maxis case, an Enforcement Directorate case of money laundering as well as a CBI case of an alleged illegal telephone connections to Sun TV's office.

According to ICICI Securities, "We expect the company to also litigate with regard to the denial of security clearances for its TV channels. The stock has already plummeted. We would advise our investors not to enter into any new positions until further clarity on the business continuity emerges. Though the operational performance remains at par, the promoter concerns have been overshadowing the stock. We place the stock Under review."

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