Sun TV Network sees stock erosion of Rs 6,000 crore as clearance issue drags on
Sun TV Network woes still continue as the Ministry of Home Affairs (MHA) still maintains a stand on not granting the network security clearance for its 33 channels. The Ministry of Information & Broadcast (MIB) is now expected to issue a show cause notice to Sun TV Network if the MHA continues to deny security clearance for its channels say recent media reports. This allows the network to present its side of the argument in court. The reason for this is the MIB is looking to be cautious in its approach to give a final decision on the contentious issue which has left the MHA and MIB disputing.
Meanwhile, the shares of Sun TV Network have taken a beating in the stock markets as the BSE reported 0.64% drop and an almost 1% drop in the NSE. Though for the first time in a week the stocks on Tuesday saw it close on the slightly positive note as it closed two points up on BSE which is rise of 0.71% and 0.05% up on the NSE, the network had seen losses for six days in a row prior to that. The losses on the company’s stocks extends to around Rs.6,000 crore, out of which promoter Kalanithi Maran is estimated to face a loss of around Rs.4,500 crore said S L Naryanan Group Financial Officer, Sun Group in a recent interview to Business Standard.
Earlier the Madras High Court had pulled up the MIB and MHA in the case of Kal Cables for not giving Sun Group a fair chance to present their arguments before directing closure of the cable network. The High Court had then set aside the MIB order on the closure of Kal Cables operations. It is also expected that a second meeting with the Prime Minister’s Office (PMO) will be convened soon with the MHA and MIB say some media reports. The first meeting with the PMO had the Prime Minister’s Principal Secretary finding merit in the argument of MHA. However, at that time I&B Minister Arun Jaitley was not in the country and a decision was expected to be taken after his return on June 25.
Contrary to the approach with regards to Kal Cables issue, MIB has taken a cautious approach on the issue and has even asked the MHA to review the decision. The MIB had also sought the legal advice of the top legal experts. Attorney General Mukul Rohatgi’s opinion is on the side of Sun TV Network getting security clearance as the pending cases against the promoters cannot be grounds to deny security clearance. A stance which the MIB seems to agree on and it also argued that the promoters of other channels too have criminal cases against them and that shutting a channel on the grounds of pending cases could be fraught with the risk of successor regimes using the precedent to clamp down on inconvenient viewpoints.
The denial of security clearance by the MHA was on the grounds that the three cases against the promoters pose national and economic security concerns. The MHA is following the UN guidelines in which economic security is considered as a matter of national security.
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