Hyderabad: Enforcement Directorate attaches properties of DC Holdings
The DCHL is currently under the Corporate Insolvency Resolution Process (CIRP) process in which a resolution plan for only Rs.400 crore has been approved by the NCLT.
Hyderabad: The Enforcement Directorate(ED) has provisionally attached immovable assets totaling to Rs.122.15 crore under the Prevention of Money Laundering Act, 2002 (PMLA) in a loan fraud case.
The attached assets belong to Deccan Chronicle Holdings Limited (DCHL) and two of its former promoters namely T Venkatram Reddy and T Vinayakravi Reddy and that of a benami company floated by them.
The immovable assets are consisting of 14 properties located in New Delhi, Hyderabad, Gurgaon, Chennai, Bangalore etc. All these attached assets are not covered under the NCLT process.
This is the second attachment in this case. After this attachment in addition to the earlier attachment, the total amount of assets attached so far comes to Rs.264.56 crore.
Investigations under PMLA were initiated by ED against DCHL and its management in the year 2015, based on six FIRs and corresponding charge-sheets filed by the Bengaluru unit of Central Bureau of Investigation (CBI).
Another charge-sheet has been filed by CCS police and a prosecution has also been filed by SEBI against the DCHL. The total loan fraud committed by DCHL and its promoters is estimated to be Rs.8180 Crore.
The DCHL is currently under the Corporate Insolvency Resolution Process (CIRP) process in which a resolution plan for only Rs.400 crore has been approved by the NCLT.
Investigation conducted under PMLA revealed that the three promoters of DCHL namely P K Iyer, T Venkatram Reddy and T Vinayakravi Reddy hatched a well-planned conspiracy and manipulated the balance sheets of the company inflating the profits-advertisement revenue and grossly understated the financial liabilities of the company to paint a rosy picture for years to cheat the banks and its shareholders.
Balance sheets of the company were fudged and loans taken from one bank were hidden from other financial institutions. Over the years, the DCHL availed credit facilities to the tune of more than Rs.15,000 crore.
Money trail investigation revealed that most of the loans were cyclically rotated into group companies and were diverted to pay back older loans. Loans taken for working capital requirements and for business needs of the DCHL were diverted to extravagant projects and the diverted funds which were so invested into new projects without the consent of the banks and were ultimately shown as losses.
Substantial amounts out of the loans were diverted into subsidiaries which have not done any legitimate business and also into the proprietary concerns of the two ex-promoters without any proper accounting.
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