On Tuesday, June 13, the Enforcement Directorate (ED) arrested T Venkattram Reddy, the former chairman and promoter of the Deccan Chronicle Holdings Private Limited (DCHL) in a money laundering case. The ED has also arrested DCHL’s former director P K Iyer and auditor Mani Oomen. According to the ED, the arrested persons were allegedly involved in money laundering adding that they defrauded the banks by submitting forged documents.
The arrests happened after the three were questioned by the ED earlier on Tuesday. The case originates from another investigation conducted by the Central Bureau of Investigation (CBI) into bank fraud and loan non-payment.
Taking to Twitter, the Enforcement Directorate said that the arrest was made on June 13, adding that it has attached movable and immovable properties valued at Rs 386.17 crore belonging to DCHL and its promoters and directors in connection with the case.
“ED has arrested T. Venkattram Reddy, P. K. Iyer, Promoters & ex-Directors of M/s Deccan Chronicle Holdings Limited & Mani Oommen [statutory auditor of DCHL]on 13/6/2023 in a bank fraud case under the PMLA, 2002. Total attachment, as on date, in this case, stands at ₹386.17 Crore,” ED tweeted.
ED has arrested T. Venkattram Reddy, P. K. Iyer, Promoters & ex-Directors of M/s Deccan Chronicle Holdings Limited & Mani Oommen [statutory auditor of DCHL]on 13/6/2023 in a bank fraud case under the PMLA, 2002. Total attachment, as on date, in this case stands at ₹386.17 Crore.
— ED (@dir_ed) June 14, 2023
According to a press release issued by ED, the probe agency alleged that Deccan Chronicle Holdings Ltd obtained 111 credit facilities in the amount of Rs 9,805 crore from 16 public and private banks under the guise of working capital/business expansion.
“However, these loans were taken by DCHL on the basis of fabricated books of accounts and the company did not disclose its correct loan
liabilities to the banks. DCHL and their promoters/directors understated the financial charges and overstated advertising revenues to consistently defraud the banks for obtaining new loans,” the press release stated.
The ED further listed the ways in which the loan funds were diverted and siphoned off by the DCHL promoters.
According to the investigation agency, DCHL and its promoters and directors consistently underestimated financial charges and exaggerated advertising revenues in order to deceive banks and secure additional loans.
“In complete violation of the loan terms & conditions, DCHL utilised 73 per cent of the loan amounts only for the cyclical repayment of existing loans. Eventually, the loans turned into non-performing assets and DCHL defaulted on principal loans of around ₹3,000 crore and caused a total loss of ₹8,180 crore to the banks and other financial creditors,” ED stated.
ED further accused the arrested persons of diverting funds to subsidiaries and affiliated organisations, including investment in the Indian Premier League (IPL). T. Venkattram Reddy purchased a private plane, while P. K. Iyer purchased a fleet of high-end cars valued at more than Rs. 30 crores. Payments to charitable trusts that were withheld and illegally returned to M/s DCHL’s promoters in cash. Declaring and distributing dividends on the basis of fake profits. The promoters, who controlled up to two-thirds of the company, collected approximately Rs. 143 crore among themselves. “Diversion of Rs. 253 crores for share repurchase in order to boost stock prices and paint a financially rosy picture,” ED alleged.
Notably, DCHL was the initial owner of the now-defunct IPL franchise Deccan Chargers and publishes the English daily Deccan Chronicle.
