New Delhi:
Astro All Asia Networks Limited, one of the four companies chargesheeted by the CBI in the telecom scam has said that it has not been "formally notified nor served with any chargesheet."
In a statement today, Astro said that it is a separate company from the Maxis Group, which bought Aircel and "there is no cross-holding between the two firms.
Following is the full statement:Astro All Asia Networks Limited and its investments in Sun Direct TV Private Limited and South Asia FM Ltd
AAANL has learnt from media reports in India that the Indian Central Bureau of Investigations (CBI) has filed charge sheets against the following parties:
a. Mr. Dayanidhi Maran (Mr. D Maran), Minister of Telecommunications May 2004 - May 2007
b. Mr. Kalanidhi Maran (Mr. K Maran)
c. Sun Direct TV Private Limited (Sun Direct)
d. South Asia Entertainment Holdings Ltd (SAEHL), AAANL's wholly owned subsidiary
e. Maxis Communications Bhd (MCB)
f. Astro All Asia Networks Limited (AAANL)
g. Mr. Ralph Marshall, AAANL's director
h. Mr. T Ananda Krishnan, and
i. Dr. JS Sharma (deceased),
citing the commission of offences punishable under Section 120B of the Indian Penal Code (criminal conspiracy) read with Sections 7, 12 and 13(1)(d) of the Prevention of Corruption Act (specifically, that of a public servant accepting gratification and abetment of that offence and criminal misconduct of a public servant).
Based on CBI's Press Statement of 29 August 2014 and other media reports, it appears that the charge sheet is premised on the CBI's findings following its investigations into a complaint made by Mr. C. Sivasankaran, the promoter of Siva Ventures Limited (SVL) which previously owned Aircel Limited (Aircel), that Mr. D Maran had allegedly abused his official position and constricted the business environment of Aircel between 2004 and 2005 with an intent to force SVL to sell Aircel to MCB and for undue favour given thereafter to Aircel. It is also alleged that as quid pro quo AAANL then paid illegal gratification to Mr. D Maran through his brother, Mr. K Maran, the promoter of Sun Direct and SAFL, in the garb of AAANL's investment in Sun Direct at an overvalue and an investment in SAFL.
While AAANL has not been formally notified nor served with any charge sheet, AAANL has been advised that there is no basis for the allegations against it. AAANL categorically denies the allegations and considers the allegations to be totally unfounded and baseless.
Both investments were publicly disclosed transactions that were only entered into once all applicable approvals in India and Malaysia were obtained, including those of the shareholders of AAANL obtained at a public shareholders meeting (which as a matter of Malaysian law required the tabling of an independent valuation report in the prescribed format based on methodology mandated by the Reserve Bank of India), the Indian Foreign Investment Promotion Board and the Cabinet Committee on Economic Affairs. The allegations are unsubstantiated and questions corporate governance standards in both India and Malaysia by suggesting that a publicly listed company monitored by regulators could make such investments so as to benefit a wholly separate company that was also publicly listed.
The CBI has proceeded to file charge sheets even though the CBI has expressly acknowledged that investigations are still incomplete and pending in Malaysia and that any charge sheet will be bereft of any evidence from Malaysia. AAANL is taking legal advice on this development and will defend any charges that may be leveled against it, its directors and its subsidiaries to the fullest extent possible.
AAANL is a UK incorporated company that was, at the material time, listed on Bursa Malaysia (Malaysian stock exchange). Khazanah Nasional Berhad, the Malaysian Government's strategic investment fund, has from the outset been a major shareholder of AAANL. Khazanah held a 21% interest in AAANL. The other shareholders included Usaha Tegas Entertainment Systems Sdn Bhd & All Asia Media Equities Ltd and their affiliates (collectively, UT, holding 42.3%), Bumiputra Foundations (9%), Malaysian government institutions (10%) and other global and institutional investors as well as public shareholders (17.7%).
AAANL is separate company from MCB. There is no cross-shareholding between MCB and AAANL, and AAANL's investments are totally unconnected with MCB's investments.
At the material time, AAANL was the leading integrated consumer media entertainment business in Malaysia. AAANLprovided entertainment and news programming to multilingual subscribers in Malaysia. This includes Indian programming for the Indian diaspora, which was secured from, amongst others, Sun TV from whom AAANLhas been acquiring content since 1996. AAANLwas a preferred distributor for Indian broadcasters as its Direct-to-Home (DTH) broadcast network was able to reach Indian homes, and provide vernacular and culturally relevant programming content to enable Indian subscribers to enjoy Indian entertainment programs whilst retaining cultural links with India. Such content would otherwise have been provided through piracy to the disadvantage of the owners of Intellectual Property Rights in India. AAANL also operated a number of multilingual radio stations, including in Indian languages, some of which were the highest rated in Malaysia.
Following a restructuring of AAANL's investments in 2010, Astro Malaysia Holdings Bhd acquired the Malaysian operations of AAANL and today, AAANL remains an unlisted subsidiary of Astro Holdings Sdn Bhd, a joint venture between Khazanah (30%), UT (57%) and Bumiputra Foundations (13%). Today, the ASTRO service operated by Astro Malaysia Holdings Bhd carries a total of 14 channels that includes content from both Sun TV as well as other suppliers of Indian content, which serve a majority of ethnic Indian homes in Malaysia.
Pursuant to initiatives between the Governments of India and Malaysia in 1995, AAANL's affiliates evaluated DTH opportunities in the Indian market, initially with Doordarshan and later with the Business India TV Group and Sun TV. When the licensing regime and FDI rules in the DTH sector was established in 2003, AAANL resumed discussions with Mr. K Maran to determine if AAANL could jointly with Sun TV (the leading broadcaster in India in which Mr. K Maran also has an interest) develop and operate a viable DTH business in India. Sun TV with its strong programming, content aggregation and library would complement AAANL's significant expertise and capabilities in technology in the DTH business developed in Malaysia. AAANL and Mr. K Maran recognized the synergies and mutual benefits of a strategic alliance to establish and provide DTH services in India to promote the Indian Government's aspirations of migrating Indian TV households to fully digital systems, and to developing the venture into a substantial production and distribution media entity in the Indian market.
In April 2007, SAEHL entered into a contract to subscribe for a 20% strategic interest in Sun Direct, which already had a valuable DTH license, for a total investment amount of Rs990 crores (US$220 million), reflecting approximately 33% of the estimated total funding requirements for the venture of Rs 3,021 Crores (US$672 million), and Mr. K Maran met the balance funding requirements of the venture. The contract was conditional upon, amongst others, AAANL's shareholders' approval and regulatory approvals (including the approvals of the Ministry of Broadcasting, India and the Indian Foreign Investment Promotion Board). AAANL provided a detailed circular to its shareholders that contained all material facts and a fair value opinion from an approved independent valuer, ENAM Financial Consultants Pvt Ltd (ENAM), a category 1 Indian merchant bank. ENAM determined the valuation range for Sun Direct to be between Rs. 3,466 - 4039 crores (US$770 - 898 million), which significantly exceeded the valuation at which the investment by AAANL in Sun Direct was made. AAANL's shareholders then unanimously approved the investment at a specially convened Extraordinary General Meeting on 25 June 2007. The last of the approvals required for the investment was obtained in November 2007 and the investment was then made in tranches between December 2007 and to-date, and there remains a balance subscription to be called under the terms of the shareholders' agreement.
AAANL also secured rights in addition to customary rights for a strategic minority stake. The terms of the contract provided that there would be effective recovery of AAANL's subscription price if the investment did not proceed as intended within the first 5 years. To-date, there has been no reason, based on the performance of Sun Direct, for AAANL to invoke the provision to seek recovery of the investment. This legally enforceable right of recovery of its investment secured AAANL's investment in the most effective manner possible. Hence, the allegations of quid pro quo currently made against AAANL are simply inconsistent and untenable in law.
Similarly, given its extensive expertise in the radio business AAANL acquired a 20% interest in SAFL in February 2008 after obtaining all applicable approvals.
The investments in Sun Direct and SAFL were in line with AAANL's long standing objective of regional growth, and consistent with its core expertise and business. All funds injected into Sun Direct and SAFL were towards subscription of equity interest in these companies and utilized solely for the business of the respective companies. No money was paid to individuals. The investments were made entirely from internally generated funds and borrowings and remitted through normal banking channels, and these were publicly disclosed transactions in India and Malaysia, including through quarterly announcements to Bursa Malaysia while AAANL was listed.
AAANL has complied with all regulations at all times. In good faith and as far as possible, AAANL cooperated with the investigations to the maximum extent permissible by law, including by making available AAANL executives for interviews with CBI as required. AAANL voluntarily provided various material to the CBI in order to assist the CBI with its inquiry, including valuation reports prepared by Indian and international investment banks that overwhelmingly contradict the allegations and demonstrate clearly that the investments in Sun Direct and SAFL are legitimate business investments.
The Supreme Court of India has been monitoring the CBI's investigations, and the CBI has informed the Supreme Court that Malaysian authorities have not cooperated with CBI's request for assistance. During the course of its investigations, the CBI has made several contradictory statements to the Supreme Court including that evidence from Malaysia is critical to establish any charge of gratification, and that the CBI is compelled to close its investigations if gratification cannot be established through evidence from Malaysia. The CBI's decision to file charge sheets in these circumstances when investigations are still incomplete violates, amongst others, the principle that investigations must be conducted fairly and thoroughly before reaching any conclusion and also does not accord with the standard of fair and equitable treatment to which AAANL as an investor in India is entitled under international law and India's treaty obligations.