Hyderabad: Religare Finvest Ltd, a non-banking financial company, has lodged a criminal complaint against the promoters and directors of Deccan Chronicle Holdings Ltd (DCHL) for alleged cheating, criminal breach of trust and criminal conspiracy over non-payment of a part of the 100 crore it had advanced to the debt-laden newspaper publisher.

In the complaint filed on 21 May with the economic offences wing of Delhi police, Religare Finvest accused the DCHL promoters and directors of under-reporting debt, dishonouring cheques and pledging the same shares as collateral with multiple lenders. A copy of the so-called first information report, or initial complaint, was reviewed by Mint.

Several other creditors of DCHL have levelled similar allegations against DCHL, which ran into financial trouble after diversifying from newspaper publishing into businesses including the erstwhile Indian Premier League franchise Deccan Chargers, a chain of book stores under the Odyssey brand name and an aviation venture.

“Lenders have realised, operationally the company is not in a position to service its debt, so they will try to recover loans through all legal means," said Satish Kantheti, head of the research division at Hyderabad-based brokerage house Zen Securities Ltd.

Chairman T. Venkattram Reddy and vice-chairman T. Vinayak Ravi Reddy were not in their offices, an aide at DCHL’s corporate office said, when Mint tried to reach them for comment. Managing director P.K. Iyer was not available, his office said. An email sent to Venkattram Reddy bounced back. The three together hold 32.66% of DCHL.

Religare Finvest, which was the single largest shareholder in DCHL with a stake of 14.48% as of 31 December, said in its complaint that it had sanctioned the company a loan against physical property and shares of 240 crore in June 2012, out of which it disbursed 100 crore.

After adjusting for sales consideration and valuation amounts in respect of immovable properties, Religare said DCHL still owed it around
57 crore by way of principal and interest and 5.14 crore by way of fees and charges. Religare said DCHL had claimed to have total assets worth 1,587.20 crore and outstanding debt of 686.39 crore as of 31 April 2012.

“After the disbursement of the aforesaid loan amount by Religare to Deccan, there was a drastic and sudden reduction in the market value of the shares of Deccan and consequently the securities provided by Deccan became inadequate and insufficient," Religare said in its complaint.

Religare said it later learned from various other lenders, including Canara Bank, that the debt on DCHL’s books was between 4,000–5,000 crore.

DCHL had long-term borrowings to the tune of
147.20 crore and short-term borrowings amounting to 3,755.70 crore, according to its September quarter earnings statement. Its total liabilities, both current and non-current, amounted to 4207.54 crore.

DCHL publishes the English-language Deccan Chronicle, Financial Chronicle and Asian Age newspapers and the Telugu daily Andhra Bhoomi.

HT Media Ltd, publisher of Mint and Hindustan Times, competes with DCHL in some markets.

DCHL shares fell 1.51% to 3.26 on the BSE on Thursday while the exchange’s benchmark Sensex declined 1.93% to 19,674.33 points.

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