 "DCHL gets shareholders' nod for higher debt limit")
The company, in a resolution, admitted the it had exceeded the Rs 1,000-crore borrowing limit set by the September 2007 AGM when it took temporary loans from banks and other financial institutions during the course of business.
"Upon such loans becoming or likely to become regular loans in nature due to non-repayment, the (Companies) Act requires the approval of the members for borrowing loans beyond Rs 1,000 crore, but not exceeding Rs 5,000 crore," the resolution said.
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According to its financial statement, the company's short-term borrowings stood at Rs 3,756 crore as on September 30, 2012, compared with Rs 445 crore as on March 31, 2011. All lenders have approached courts and the debt recovery tribunal for the recovery of loans from the company, while some had also filed winding-up petitions before the Andhra Pradesh High Court.
Interestingly, DCHL Chairman T Venkattram Reddy and Vice-Chairman T Vinayaka Ravi Reddy were absent at the meeting, according to a source. P K Iyer, the third promoter and vice-chairman of the company, had presided over the proceedings.
"Apart from conducting the agenda, Iyer answered a few questions raised by shareholders. To a question on whether the total debt has exceeded Rs 5,000 crore, he said it is now at Rs 4,000 crore," a shareholder present at the meeting told Business Standard on condition of anonymity.
When shareholders asked about the company's future, Iyer said it was business as usual. "The company has neither failed to bring out the newspaper, Deccan Chronicle, nor there were any complaints by any employee about the payment of salary. All I can say is that we will successfully come out of the present situation," Iyer said, according to another shareholder present at the AGM.
DCHL also publishes Asian Age, an English daily newspaper in Mumbai, Delhi, and Kolkata and Financial Chronicle, a business daily.
For the first time, the company shifted the venue of the AGM from the usual Basera Hotel, located right in front of its Secunderabad headquarters, to its printing press facility at Kondapur, understandably to keep the proceedings out of media glare. The AGM, started at 9 am, was a brief affair.
A reporter of a media organisation, who entered the venue with a proxy form, was quickly identified and asked by one of the bouncers to leave the premises without creating any scene. While there were about 120 online registrations, the attendance recorded at the meeting was about 80, said a person associated with the event. The person also did not want to be named.
All the three additional directors, V Lakshmana Charya, Venkateswarlu Malapaka and S Suresh, were appointed independent directors of the company, while Vinayaka Ravi Reddy was reappointed vice-chairman and managing director through separate resolutions.
In its annual report, the management said the Board of Control for Cricket in India had given a differential treatment to DCHL and citing some “untenable reasons and alleged breach of the terms of the agreement by the company, terminated the Indian Premier League franchise (Deccan Chargers) in a one-sided manner”.
Regarding the business outlook, the company said: "A process of consultation with the creditors has been set in motion. To mitigate the financial crisis, the management has decided to go for a scheme of arrangement with its creditors/lenders involving a de-merger of the print division and reorganisation of the debt subject."