ED arrests Deccan Chronicle’s T Venkattram Reddy, 2 others in loan default case

The case stems from another case being investigated by the Central Bureau of Investigation (CBI) regarding defrauding banks and non-payment of loans. According to CBI, DCHL and its promoters defaulted on loans taken from various banks which now amounts to over Rs 8,000 crore with interest.

CBI had arrested Venkattram Reddy in February 2015 in that case. The arrest was made after Canara Bank, which had filed a complaint in July 2013 against DCHL for non-repayment of loans, refused to restructure it on a plea by DCHL. Canara Bank offered a one-time settlement to the company or face legal action in July 2014.

On July 9, 2013, CBI had registered the first of its six FIRs against T Venkatram Reddy and DCHL for cheating and criminal conspiracy, and 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 Secunderabad branch of Canara Bank had lodged a complaint against DCHL when the company failed to repay a portion of the Rs 1,230 crore loan availed. The FIR states that Reddy and DCHL used the Canara Bank’s short-term corporate loans for personal use and other than the mentioned purposes.

Various banks and financial institutions have filed complaints against DCHL’s promoters for non-repayment of loans amounting to close to Rs 3,600 crore which DCHL took to invest in various ventures like IPL team Deccan Chargers. Venkattram Reddy had been charged under Indian Penal Code sections 420, 120b, 468, and 471 for wilfully misleading the banks and cheating and submitting fake documents for procuring loans.

In October 2020, ED had attached DCHL’s assets worth Rs 122.15 crore, taking the total value of DCHL’s attached assets to over Rs 260 crore. At least 14 properties of DCHL located in Hyderabad, Bengaluru, Delhi, Gurgaon, and Chennai were also attached under the Prevention of Money Laundering Act (PMLA).

Last December, the Securities and Exchange Board of India (Sebi) had issued a notice to DCHL and its promoters asking them to pay Rs 4.29 crore for misrepresentation of financial statements of the company from 2008-09 to 2011-12.