AP high court refuses Deccan Chronicle plea against lenders

Promoters in their petition argue that the lenders' action will hamper the proposed demerger of print biz from the rest of the activities

The Andhra Pradesh high court on Wednesday refused a plea by the promoters of Deccan Chronicle Holdings Limited to stay the legal proceedings initiated by lenders in lower courts against the troubled media company.

The promoters in their petition argued that the lenders' action would hamper the proposed demerger of the print business from the rest of the activities. However, the court refused to issue any interim orders in the case.

The bench has asked the petitioner to approach the lower courts handling these proceedings for any such relief besides directing the lenders to file their objections by June 5, said Dharma Suri, a counsel representing one of the lenders.

Early last month the DCHL had approached the high court seeking approval for a scheme of arrangement to demerge the print business. But, ICICI Bank, one of the lenders to the company, challenged the move stating that such a proposal had to be first cleared by the Securities and Exchange Board of India before approaching the court.

The DCHL promoters maintained that the proposed demerger -- through which it seeks to transfer the print business in favour of Land Interactive Media Limited incorporated last year -- was to facilitate bringing in a strategic investor.

Several banks and financial institutions had approached the debt recovery tribunal as well as courts seeking attachment of properties of the promoters and the company, including winding up of the firm after it failed to repay the loans.

The company had raised over Rs 3,000 crore in short-term loans just after March 2012. Lenders alleged the company had re-mortgaged the same properties with several banks to get these loans.

Though the company at its recent annual general meeting maintained that a process of consultation with the creditors had been set in motion, no lender so far has either acknowledged such a move from the company or accepted any debt restructure proposal.

ICICI Bank's petition challenging the company's decision to seek AP high court's approval for a scheme of arrangement to demerge the print business is expected to come up for hearing soon.

The debt recovery tribunal had ordered the attachment of properties of DCHL and its promoters in various cases filed by banks and institutions, including ICICI Bank, Canara Bank, Axis Bank and Kotak Mahindra Bank.

The company is also facing a forgery case filed by city-based Karvy Brokings Limited.