Both companies refuted the allegations made by Indian entrepreneur and former owner of Aircel, C. Sivasankaran, that he was pressured to sell Aircel to MCB by then telecoms minister Dayanidhi Maran, and that Astro's purchase of a 20% stake in India's Sun TV owned by Maran's brother was quid pro quo for the alleged coercion.
In a letter dated Oct 10 and addressed to CBI chief A. P. Singh, MCB and Astro countered allegations made by Sivasankaran with supporting documents and explained in detail what transpired from the time it was offered to buy a stake in Aircel to the completion of the deal and thereafter.
MCB and Astro wrote the letter a day after the CBI registered a case via a First Information Report (FIR) against Ananda, his trusted top executive Ralph Marshall, Dayanidhi Maran and his media baron brother Kalanidhi and three companies, alleging criminal conspiracy in the Maxis-Aircel deal.
Astro says it is grossly false to say that there was a quid pro quo for the purchase of Aircel by MCB MCB bought a 74% stake in Aircel for US$800mil from Sivasankaran via Siva Ventures Ltd. MCB claimed the deal was done on a willing-buyer, willing-seller basis. Despite exiting, Sivasankaran retained “upside benefits” in a 26% stake if and when Aircel was floated. But due to several reasons, including the global economic meltdown, the flotation did not take place.
Failing to get the “upside benefits” from the initial public offering, Sivasankaran went for international arbitration, but his claims were dismissed early this year, according to the letter. Only after that did he make a complaint with the CBI, more than five years after the conclusion of the deal on Dec 30, 2005.
Astro, meantime, said in its letter that timing considerations contradicted the allegation of quid pro quo. Astro said its attempts to get into direct-to-user satellite broadcasting in India dated back to the 1990s.
The proposed joint venture was reported to the Astro board in March 2005, according to the letter, and was subject to further board approval in June 2005, well before MCB expressed an intention to acquire Aircel in October 2005.
Astro further said in its letter that the deal to acquire Sun TV was a legitimate business transaction as the two were long-standing business partners and both Astro and Sun TV carried out extensive work on valuation of the venture in line with industry standards.
The CBI has been on the case for nearly four months now and MCB has given its full cooperation. The letter by MCB said Marshall had on Sept 12 appeared before the CBI to explain the “true and correct” facts leading up to the Maxis-Aircel deal.
MCB had earlier said that “whilst disappointed that the FIR has been filed, MCB will continue to co-operate with the CBI in its investigation in full confidence that the allegations against it will prove to be unfounded and without basis.”
On Monday, the homes and offices of Dayanidhi and Kalanidhi were raided in New Delhi, Chennai and Hyderabad by the CBI.
At the same time, the agency had claimed that it had written to the Malaysian authorities to get more information on MCB, Astro and other related companies.
This news has generated a lot of attention globally.
Ananda is one of Malaysia's richest men who has built a sizeable empire, both here and abroad. Ananda had another corporate fallout with Indonesian tycoon James Riady over TV rights but that came to an amicable close last year.
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