In accordance with the Prevention of Money Laundering Act (PMLA), 2002, the Directorate of Enforcement (ED) has detained T. Venkattram Reddy, P. K. Iyer, and Mani Oommen, who are the promoters and ex-directors of M/s Deccan Chronicle Holdings Limited (DCHL) and the statutory auditors, respectively.
On the basis of many FIRs filed by the CBI Bengaluru and Telangana Police alleging criminal conspiracy, cheating, and forgery by M/s Deccan Chronicle Holdings Limited, its promoter, directors, and others, the ED launched a money laundering probe. The PMLA probe also covered the prosecution complaint brought by the Securities & Exchanges Board of India against M/s DCHL and others.
According to the PMLA inquiry, T. Venkattram Reddy, Chairman of M/s Deccan Chronicle Holdings Limited, and the other promoters/directors cheated the banks and NBFCs with the help of the statutory auditor. Under the guise of needing operating capital or cash for company growth, DCHL obtained 111 credit facilities worth Rs. 9,805 crores from 16 public sector and private banks.
However, DCHL obtained these loans based on falsified books of accounts, and the business failed to disclose the true loan liabilities to the banks. In order to constantly cheat the banks and get more loans, DCHL and its promoters/directors exaggerated advertising income while understating the financial costs.
The promoters of M/s Deccan Chronicle Holdings Limited (DCHL) engaged in a series of fraudulent activities to divert and misuse loan funds. These activities included diverting new loans to repay existing ones, investing in subsidiaries and entities such as the Indian Premier League (IPL), making extravagant personal purchases like private aircraft and high-end cars, and illicitly channelling funds through charitable trusts.
Additionally, they distributed dividends based on fictitious profits, pocketing a significant amount for themselves. The promoters also used a substantial sum for share buybacks to manipulate stock prices and create a false impression of financial stability. As a result, DCHL defaulted on principal loans worth approximately Rs. 3,000 Crore, causing a massive loss of Rs. 8,180 Crore to banks and other financial creditors.
Earlier in this matter, the ED had attached the promoters and directors of M/s DCHL and their moveable and immovable property totalling Rs. 386.17 Crore. The probe is being expanded upon.
