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Business News/ Companies / News/  DCHL falls 8% on forensic audit reports
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DCHL falls 8% on forensic audit reports

A forensic audit involves the application of accounting methods for collecting evidence for investigation and prosecution of wrondoing such as fraud

DCHL has put its Indian Premier League cricket franchisee Deccan Chargers on sale to clear some of its debt. (DCHL has put its Indian Premier League cricket franchisee Deccan Chargers on sale to clear some of its debt.)Premium
DCHL has put its Indian Premier League cricket franchisee Deccan Chargers on sale to clear some of its debt.
(DCHL has put its Indian Premier League cricket franchisee Deccan Chargers on sale to clear some of its debt.)

Hyderabad: Shares of Deccan Chronicle Holdings Ltd (DCHL) tumbled on Tuesday after media reports that state-owned Canara Bank, one of its creditors, had initiated a forensic audit of the newspaper publisher, which a central government official said was laden with 5,000 crore of debt. The stock fell 7.62% to end trading at 12.25 on BSE on a day the benchmark Sensex gained 0.49% to 17,852.95.

“Canara Bank is the lead banker of lenders’ consortium (to DCHL) and the bank is conducting forensic audit...," PTI cited D.K. Mittal, secretary of the department of financial services in the finance ministry, as saying in New Delhi. “Government wants to study systemic failure in case of (DCHL)."

Officials at Canara Bank could not be reached for comment.

A forensic audit involves the application of accounting methods for collecting evidence for investigation and prosecution of wrondoing such as fraud.

Mittal said the total exposure of banks to DCHL—which publishes the English-language newspapers Deccan Chronicle, Financial Chronicle and The Asian Age and Telugu daily Andhra Bhoomi—was around 5,000 crore. Of this, public sector banks account for 3,800 crore.

“Going by the reports, the debt appears to be more than five times of the reported revenues by DCHL, raising concerns whether there is any fraud in its reporting," said Satish Kantheti, head of the equity research division at Hyderabad-based brokerag firm Zen Securities Ltd. “The forensic audit will help in determining the actual financial health of the company."

DCHL has put its Indian Premier League cricket franchisee Deccan Chargers on sale to clear some of its debt.

Its creditors have approached the Bombay and Andhra Pradesh high courts and moved the debt recovery tribunal after its promoters failed to repay loans. IFCI Ltd has filed a petition in the Andhra Pradesh high court to wind up the firm after a cheque for 25 crore bounced.

The Registrar of Companies (RoC), which functions under the corporate affairs ministry, has initiated a preliminary scrutiny of the books of the media group, PTI reported. “The case is being looked at a very preliminary stage by the RoC," Naved Masood, secretary in the ministry of corporate affairs, was quoted as saying.
HT Media Ltd, publisher of Mint and Hindustan Times, competes with DCHL in some markets.

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Published: 11 Sep 2012, 11:41 PM IST
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