Move to recover banks? dues gets complicated
Kotak Mahindra Bank (KMB) has got a stay order from the debt recovery tribunal (DRT) in Hyderabad against IDBI Bank?s decision to transfer rights on the trademarks of Deccan Chronicle Holdings? (DCHL) publications, sources close to the development said on Monday. While KMB is not against the sale of the brands, it wants an escrow account to be created and the sale proceeds to be distributed across lenders.
Late last month, IDBI Bank had invited bids for the group?s four publications ?Deccan Chronicle, The Asian Age, Andhra Bhoomi and Financial Chronicle. The bank had sought an earnest money deposit of R15.15 crore for Deccan Chronicle, R20 lakh for Andhra Bhoomi, R60 lakh for Asian Age and R5 lakh for Financial Chronicle.
?Due to the failure on the part of DCHL to repay the financial assistance provided to it, IDBI Bank has decided to enforce the security by transferring, to the highest bidder, its rights/interest on the trademarks for a consideration. IDBI Bank hereby invites all the interested persons to submit their proposals/bids for acquiring, on an ?as is? basis, the trademarks collectively or separately for each trademark,? a request for proposal (RFP) document floated by the bank on February 27 said.
A trademark is a distinctive name, symbol, motto, mark or design registered with the Trademark Authority of India under the Trademark Act that legally identifies a company or its products and services and prevents others from using identical or similar marks.
The deeds of hypothecation for the trademarks in favour of IDBI Bank were executed by the promoters of DCHL in September 2012, while the agreement for a Rs 250-crore term loan was initially entered into on March 23, 2011, and later rolled over by another six months on March 24, 2012.
According to the terms of the loan agreement, DCHL was also required to create a first charge on its fixed assets so that the minimum security cover available to IDBI Bank during the tenor of the loan did not fall below 1.25 times and after the rollover, the loan, including principal and interest, was to be repaid in three equal instalments on July 26, 2012, August 26, 2012, and September 26, 2012.
The hypothecation deed had stated that in the event of any breach or default by DCHL, IDBI Bank would have the option to sell the trademarks in all the classes that it is registered in or advertising the availability of the goods manufactured under the trademark, among other things, within 15 days.
Last week, public sector lender Canara Bank had filed charges of fraud against the Hyderabad-based media group Deccan Chronicle for siphoning off funds loaned to the company, a top official from the bank told FE. A group of 24 lenders have an exposure of around Rs 4,300 crore to DCHL. In September last year Canara Bank had appointed audit firm Deloitte to undertake a forensic audit on DCHL.