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Astro denies wrongdoing in Sun TV deal

Malaysia's Astro has denied allegations that its 20% stake in India's Sun Direct satellite broadcaster was a quid pro quo for the purchase of Indian telco Aircel by sister company Maxis Communications Bhd (MCB), according to local reports.

Indian entrepreneur and former owner of Aircel, C Sivasankaran, has alleged that he faced pressure to sell Aircel to MCB by then telecommunications minister Dayandidhi Maran, and that Astro's investment in direct to home (DTH) operation Sun Direct, owned by Maran's older brother, was quid pro quo for the deal.

In a letter to the chief of India's Central Bureau of Investigation (CBI) dated 10 October, Astro All Asia Networks has refuted the allegations and set out its relationship with Sun TV which, it claims, dates back to 1996 – according to The Malaysia Star.

Astro reportedly says due to India's broadcasting regulations on foreign direct investment, it was initially restricted to buying Tamil language programmes from Sun TV for its own pay-TV platform, despite wanting to be further involved in the Indian TV sector. It also reportedly claims to have explored opportunities with Doordarshan, Business India TV Group and Zee TV.

However, in early 2004, the letter reportedly states Astro and Sun resumed their discussions, and planned to launch a direct to home (DTH) satellite service together. The Astro board finally approved the investment in Sun Direct for the venture in October 2006.

The definitive agreements were signed on 5 April 2007, and Astro paid the first tranche of payment for a 20% stake in Sun Direct in 2007, according to the Malaysia Star.

Astro reportedly said it is "grossly false" to suggest that this was quid pro quo for the majority purchase of Indian mobile operator Aircel by MCB.

Last week, the CBI registered a case via a First Information Report (FIR) for alleged criminal conspiracy in the Maxi-Aircell deal against the Malaysian billionaire owner of both Astro and MCB, T Ananda Krishana; his top executive Ralph Marshall; Indian politician Dayanidhi Maran; and his brother and owner of the Sun TV network Kalanidhi Maran.

The CBI also raided the homes and offices of Dayanidhi and Kalanidhi Maran in New Delhi, Chennai and Hyderabad on 10 October

MCB paid US$800 million to buy a 74% stake in Aircel on 30 December 2005 from Sivasankaran via Siva Ventures Ltd. The company denies any wrongdoing in the deal, which it claims Sivasankaran entered into willingly.

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