India’s telecom scandal has taken more casualties in the stock market.On Thursday, the share price of Sun TV Network Ltd. fell 28% to close at 272 rupees ($6) and that of airline SpiceJet Ltd. fell 16% to 34.50 rupees (77 cents), on news that a petition was filed linking former telecom minister Dayanidhi Maran to an ongoing corruption probe.Dayanidhi Maran’s brother Kalanithi Maran owns Sun TV and has a large stake in SpiceJet. A spokeswoman for the Central Bureau of Investigation said Dayanidhi Maran is part of their wide-ranging preliminary investigation into the telecom scandals which have been going on since January. She added that no new action involving Dayanidhi Maran has been taken in recent days.Dayanidhi Maran is currently India’s textiles minister and served as telecom minister from February 2004 until May 2007. He was succeeded by A. Raja, who has been arrested along with 13 others in relation to the alleged rigged sale of telecom licenses in 2008. Dayanidhi Maran and Mr. Raja both belong to the Dravida Munnetra Kazhagam party.The petition filed by a Delhi-based civil interest nonprofit on Wednesday, asked the Supreme Court to accept new evidence including a piece that ran in Tehelka magazine last week as part of their ongoing public interest litigation case on the telecom scam. This case, which was filed in 2010 has played a key role in keeping a spotlight on the scandal.The Tehelka story raises questions about the telecom license issued by Dayanidhi Maran’s ministry in 2006 to mobile phone operator Aircel Ltd., which had been acquired by a Malaysian company in late 2005. In 2007, a unit of the Malaysian company made investments in broadcasting company Sun Direct Pvt. which is co-owned by Kalanithi Maran. Tehelka alleges that the grant of telecom license and investments in Sun Direct are related.Pranav Sachdeva, one of the lawyers who signed the petition, said they want the Central Bureau of Investigation to look into these allegations.Dayanidhi Maran denied Tehelka’s accusations, saying he did not favor any company during his tenure as telecom minister. Aircel declined to comment.
The brunt of these allegations is being felt by Sun TV Network’s shareholders. In an interview, the company’s chief financial officer, V.C. Unnikrishnan, on Thursday called the massive selling in Sun TV’s stock “unfair.” He said Dayanidhi Maran does not have any investments in his company, and made it clear that Sun TV has nothing to do with the granting of telecom licenses.“You have to look at the fundamental business model, which has been working well,” said Mr. Unnikrishnan, explaining that the firm’s advertisement revenues and earnings have been rising in recent months.In a note to clients, local research brokerage ICICIdirect.com said the sharp fall in the price of Sun TV stock also seems to be a very attractive price to buy, but recommended its clients avoid “bottom fishing”–buying stock on sharp falls–until further details emerge.A spokesman for SpiceJet said the company doesn’t comment on market rumors and speculations. SpiceJet was not named in the Tehelka story.