ED Attaches Assets Of Deccan Chronicle, Promoters

The Enforcement Directorate (ED) has provisionally attached immovable assets totaling Rs 122.15 crore belonging to Deccan Chronicle Holdings Limited (DCHL) and two of its former promoters T Venkatram Reddy and T Vinayakravi Reddy, and that of a benami company floated by them, under the Prevention of Money Laundering Act, 2002, (PMLA) in a loan fraud case.

The assets include 14 properties located in New Delhi, Hyderabad, Gurgaon, Chennai, Bangalore etc.

These assets are not covered under the NCLT process.

This is the second attachment in the case. With this attachment, the total value of assets attached so far comes to Rs 264.56 crore.

The ED has also seized high-end vehicles registered in the name of DCHL from the possession of the promoters and their close family members.

The investigations under the PMLA were initiated by the ED against DCHL and its management in the year 2015. The total loan fraud committed by DCHL and its promoters is estimated to be Rs 8,180 crore.

Investigation conducted under the PMLA reportedly revealed that the three promoters of DCHL, namely P K Iyer, T Venkatram Reddy and T Vinayakravi Reddy, had hatched a well-planned conspiracy and manipulated the balance sheets of the company inflating the profits and advertisement revenues, and grossly understating the financial liabilities of the company, to paint a rosy picture for years to cheat banks and its own shareholders.

The balance sheets of the company were fudged, and loans taken from one bank were hidden from other financial institutions.

Using this, over the years, DCHL availed itself of credit facilities to the tune of more than Rs 15,000 crore.

The money trail investigation revealed that most of the loans were cyclically rotated among group companies and diverted to pay back older loans.

Loans taken for working capital requirements and for the business needs of DCHL were diverted to extravagant projects, and the diverted funds which were so invested into new projects without the consent of the banks were ultimately shown as losses.

It was also reported that the accused promoters had received hefty kickbacks from the investment made by DCHL into Odyssey at highly inflated values.

There were many suspicious donations to various trusts.

DCHL is currently under the CIRP process in which a resolution plan for only Rs 400 crore has been approved by the NCLT.

The ED investigation however revealed that despite the initiation of the CIRP process, the promoters of DCHL and their close family members continue to yield indirect control over the newspaper, and are working in senior capacities drawing large monthly salaries.

The promoters were also found to be re-purchasing the mortgaged assets at discounted rates through private treaties by using concealed proceeds of crime through a front company.