Sun TV Network Ltd. and SpiceJet Ltd., companies controlled by the Maran family, plunged on report India’s federal investigator is probing an investment by Malaysia’s Maxis Group into a business run by the Marans.
Sun TV tumbled a record 28 percent to 272.55 rupees in Mumbai. SpiceJet sank 16 percent to 34.5 rupees at the 3:30 p.m. close, the steepest fall in almost five years.
“It’s a free fall for these stocks,” said Ashish Shah, an analyst at BP Equities Pvt. in Mumbai. “The fact that one of the family members can possibly be probed is enough for funds to push the sell button.”
The Central Bureau of Investigation will investigate an allegation that Maxis Group invested 5.99 billion rupees ($133 million) in the Maran family business in return for 14 spectrum permits awarded to Aircel Group, 74 percent owned by Maxis, the Times of India newspaper reported, citing unidentified officials from the federal agency.
Federal Textiles Minister Dayanidhi Maran, brother of Kalanithi Maran, chairman of Sun TV and SpiceJet, was telecommunications minister at the time, the newspaper said.
Dayanidhi Maran wasn’t available when called at his home in New Delhi and didn’t respond to an e-mail. Spicejet Chief Executive Officer Neil Mills didn’t answer two calls made to his mobile phone.
Sun TV’s Chief Financial Officer S. Natrajhen couldn’t be reached at his office phone. Sandip Das, chief executive officer of Maxis Bhd. wasn’t available when called at his office today and didn’t immediately respond to an e-mail seeking comment. A call to his mobile phone also went unanswered.
“Even if Dayanidhi doesn’t hold any stake in these two companies, investors always look at it as businesses run by the family, and not an individual,” BP Equities’ Shah said.