FP Editors Sep 18, 2013
Controversy never dies down for Kalanithi Maran’s Sun TV group.
Just when the group is slowly getting out of the woods after the CBI probe and the onslaught of Tamil Nadu Chief Minister Jayalalitha, analysts have raised new concerns about the company’s functioning.
According to a report in the Economic Times today, Kotak Institutional Equities has pointed out that the group’s aircraft buying and selling is worrying. “Non-business isuues remain an overhang on Sun TV stock and force continued caution,” the brokerage has been quoted as saying in the report.
The ET report says in five years Sun TV bought three aircraft and sold two. The latest was in 2013, when it sold an aircraft for Rs 190 crore and spent Rs 295 crore for a replacement, it said.
The plane the company sold was only three years old.
Kotak has said that the old aircraft was sold due to operational concerns. “It remains unclear why an informed buyer would pay Rs 190 crore “equal to net block, nil loss on sale) for such an asset,” the ET report quotes Kotak research note.
The note also says the company has robust free cash flows of Rs 465 crore.
Motilal Oswal also had raised similar concerns, the ET report notes.
“When a life of an aircraft is 15 years, why would you buy and sell aircraft in a short span of time?” Amit Tandon of Investor Advisory Services has been quoted as saying in the report.
Meanwhile, another report in the VC Circle has said that Maran and his wife Kavery have emerged the highest paid executives in the country in FY13. Both of them took home a cool Rs 112.5 crore as salaries during the year, when their companies were not doing great. However, the amount was marginally lower than their remuneration a year ago.
A Mint report notes that the average salaries of directors of top 500 companies in 2012-13 rose more than 25 percent while the profits fell 1.6 percent and debt rose about 17 percent.
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