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The Central Bureau of Investigation (CBI) on Saturday arrested Deccan Chronicle Holdings Private Limited (DCHL) Chairman T Venkattram Reddy and his younger brother and Managing Director T Vinayaka Ravi Reddy for using forged documents to avail loans from a public sector bank. The case was filed against the company promoters in July 2013.
A team of CBI officials from Bengaluru, who arrested the duo, later produced the accused before a judge at his residence, seeking their custody. A local CBI official confirmed the development.
The Reddy brothers have been facing several criminal cases for loan defaults, to the tune of over Rs 4,000 crore, to banks and other financial institutions. Their arrest comes almost two years after Bengaluru-headquartered Canara Bank, lodged a complaint in March 2013 with the CBI against the DCHL management after it had failed to repay the loan dues amounting to around Rs 350 crore.
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In May 2013, then Canara Bank Chairman R K Dubey disclosed that they had filed the complaint, as the forensic audit conducted on the DCHL accounts through Deloitte had revealed several gaps and financial irregularities. He also had alleged that the company promoters had even furnished forged property documents to secure the loans.
It was also alleged that the accused utilised short-term corporate loans for purposes other than for which these were sanctioned. In the FIR, it was further alleged that the company had filed fabricated balance sheets, concealing actual borrowings from Canara Bank and other lenders, besides alienating the property mortgaged to Canara Bank.
The true picture of Deccan Chronicle’s financial mess had started unfolding in July 2012, after IFCI had filed a winding-up petition against the promoters when DCHL failed to redeem the non-convertible debentures worth Rs 25 crore held by the firm.
Within a month, Karvy, a brokerage firm, filed a complaint with the local police, stating that it was misled by the DCHL promoters to transfer the company shares that were pledged with Future Capital to Religare Finvest. The police registered an FIR under sections involving forgery and criminal breach of trust against the duo. Following this, several banks and financial institutions started approaching the high court and the debt recovery tribunal.
It was still not known as to why the Reddys had to raise so much debt, as the Deccan Chronicle newspaper is the market leader in Hyderabad. The company’s entry into Indian Premier League (IPL) and incorporation of a non-starter cargo airline were some of the known activities in which the promoters had lost their money.
