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Deccan Chronicle Bank Loan Fraud Case: ED Conducts Fresh Searches

Officials of the Enforcement Directorate (ED) on Thursday, 22 August, conducted searches at the premises of the Deccan Chronicle Holdings Limited (DCHL) in Secunderabad and at the properties of its owner in Banjara Hills in Hyderabad and in New Delhi.

According to reports, these raids were carried out after a case booked by the Central Bureau of Investigation (CBI) in 2015 over alleged financial irregularities by DCHL after availing loans from a bank.

Other media reports added that six charge sheets were filed by CBI in a bank loan fraud case and the ED conducted a fresh search as it found the previous calculated amount of alleged fraud, which it had pegged at Rs 1,161 crore, to be far from satisfactory.

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In June this year, the Hyderabad bench of National Company Law Tribunal (NCLT) approved Kolkata-based Srei Multiple Asset Investment Trust's (Vision India Fund) resolution plan for the insolvent Deccan Chronicle Holdings Ltd. The Srei group resolution plan for the company involves around Rs 400 crore.

According to the order, Srei Multiple Asset Investment Trust would have to obtain necessary approvals for the acquisition within a year or any period provided by the law concerned.

DCHL had allegedly availed loans by overstating the receivables, under-stating huge loan liabilities by furnishing fabricated financial statements and not disclosing the loans. Investigators earlier said that in all, it availed 111 loans amounting to Rs 10,000 crore from 16 different banks during 2004 to 2012.

The bank loan fraud caused a loss of Rs 1,161.93 crore to six public sector banks –Canara Bank, Andhra Bank, Indian Overseas Bank, Central Bank of India, Corporation Bank and IDBI Bank.

These loans were used for other than the specified purposes, investing in 20 group companies and firms, acquiring companies with huge premiums, and even payments for Indian Premier League (IPL) franchise Deccan Chargers.

In February 2015, Deccan Chronicle owner T Venkattram Reddy and managing editor T Ravi Vinayak Reddy were arrested and questioned by a team of the CBI from Bengaluru. The group’s vice chairman PK Iyer, as well as the company's auditors CB Mouli & Associates, are the other accused in the case.

(Published in an arrangement with The News Minute.)

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