Former chairman and promoter of Deccan Chronicle Holdings Limited (DCHL), T Venkattram Reddy, along with the company’s former director P K Iyer and auditor Mani Oomen, were arrested by the Enforcement Directorate (ED) on Wednesday (June 14). The agency has accused them of being involved in money laundering and defrauding banks by submitting fake documents. Who is T Venkattram Reddy? Reddy, 53, is the former owner and promoter of Deccan Chronicle Holdings Limited (DCHL), which publishes the English daily Deccan Chronicle, and other newspapers. He became the Chairman and editor-in-chief of Deccan Chronicle after his father T Chandrashekar Reddy, who was a Congressman and a Rajya Sabha member from 1981 till 1993, passed away. T Venkattram Reddy subsequently served the remaining two years of his father’s term as RS MP, but was not renominated by the Congress, after which he quit politics. He was also the first owner of the former IPL team Deccan Chargers. Why was he arrested? The ED arrested him after accusing him of money laundering in the case of loans taken from Canara Bank. The agency has stated that Reddy misused Canara Bank’s short-term corporate loans for personal use, and diverted the money to other purposes than mentioned. The ED followed it up after the CBI registered six FIRs against Reddy, DCHL, and former director P K Iyer, accusing them of defrauding banks and defaulting on loan repayments worth crores. On July 9, 2013, CBI registered the first of its six FIRs against T Venkatram Reddy and DCHL for cheating and criminal conspiracy, accusing him and the company’s auditors of cheating Canara Bank by submitting cooked-up financial statements and concealing liabilities and borrowings from other banks and financial institutions. The action against him was taken after the Secunderabad branch of Canara Bank had lodged a complaint in the CBI in June 2013 against DCHL, when the company failed to repay a portion of the Rs 1,230 crore loan availed. Notably, this isn't the first time that Reddy has been arrested. He was first held by the CBI in the aforementioned cases. Two months later, the Delhi Police arrested him for allegedly assaulting a private financier and threatening to kill him. What is the alleged financial fraud done by Reddy and why did DCHL fail to repay its loans? The CBI and ED allege that Reddy and DCHL furnished false financial statements to several banks, especially Canara Bank, and failed to show liabilities and borrowings from other banks and financial institutions while applying for loans. The loans were supposed to be for investment in DCHL but they were allegedly diverted to other business ventures like the IPL franchise, Odyssey chain of bookstores and lifestyle products, and chartered airlines. The agencies also accuse Reddy of using loans to purchase luxury cars and maintain his flamboyant life. These expenditures resulted in huge financial losses for DCHL and it defaulted on returning its loans for the first time in early 2013. The main FIR is based on Canara Bank's complaint.
