DCHL is wilful defaulter, says Central Bank

Sep 11 2013, 15:55 IST
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SummaryDeccan Chronicle Holdings (DCHL) has been declared a wilful defaulter by Central Bank of India, which has referred the matter to the RBI

Deccan Chronicle Holdings (DCHL) has been declared a wilful defaulter by Central Bank of India, which has referred the matter to the RBI, two bankers familiar with the development said. A senior Central Bank executive said the bank was expecting to formally list the company as a wilful defaulter in the next 10 days. The public sector lender intimated the Hyderabad-based DCHL two weeks ago. Central Bank, that has lent R57 crore to DCHL, is not part of the consortium of 20 banks which has a combined exposure of about R4,000 crore to the media group.

Loans totalling R23,802 crore have been listed as wilful defaults by individuals and companies as of March 31, according to Credit Information Bureau India Limited (Cibil).

Central Bank had filed a winding-up petition against DCHL in the Andhra Pradesh High Court a month ago. DCHL reported a profit of R14.82 crore in the quarter ended March 31 against a loss of R2.21 crore in the December 2012 quarter. For the 18-month period to September 2012, the company posted revenues of R843.4 crore and a net loss of R1,040.4 crore. It has not reported results for Q1FY14.

In February this year, IDBI Bank, which has an over R250-crore exposure to the group, had invited bids for four newspaper titles owned by the group ó the English dailies Deccan Chronicle, Financial Chronicle and The Asian Age and the Telugu daily Andhra Bhoomi. However, there have been no takers so far.

Around the same time, Canara Bank filed a complaint against the company and its chairman T Venkattram Reddy for criminal conspiracy, cheating and forgery.

The Central Bureau of Investigation (CBI) has booked a case of fraud against the chairman and MD Vinayak Ravi Reddy, along with other members of the management and auditors. T Venkattram Reddy, vice-chairman PK Iyer and MD Vinayak Ravi Reddy are the promoters of the company. DCHL owned an Indian Premier League (IPL) team, Deccan Chargers, which was asked to exit the tournament by the BCCI.

Trouble started for DCHL when it defaulted on its loans last year; in October, the corporate debt restructuring (CDR) cell rejected a proposal to recast its debt. According to RBIís latest circular, once a company is declared a wilful defaulter, it loses access to finance from banks and other financial institutions. Further, promoters of such companies cannot be given fresh funds for five years to start a new venture. Lenders can

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