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Money laundering case: ED attaches assets of Deccan Chronicle, its ex-promoters worth Rs 122.15 cr

According to ED, the attached assets include 14 properties located in New Delhi, Hyderabad, Gurgaon, Chennai, Bangalore etc. The ED said none of the assets are covered under the National Company Law Tribunal (NCLT) process.

Written by Deeptiman Tiwary | New Delhi | Updated: October 16, 2020 10:17:10 pm
Chinese betting racket busted, ED freezes bank accounts with Rs 47 croreThe Enforcement Directorate (ED)

The Enforcement Directorate (ED) has provisionally attached immovable assets worth Rs 122.15 crore belonging to Deccan Chronicle Holdings Ltd (DCHL) and its former promoters in connection with a money laundering case. The case, where DCHL’s former promoters T Venkatram Reddy and T Vinayakravi Reddy are accused, is associated with an alleged bank loan fraud of Rs 8,180 crore committed by the group.

According to ED, the attached assets include 14 properties located in New Delhi, Hyderabad, Gurgaon, Chennai, Bangalore etc. The ED said none of the assets are covered under the National Company Law Tribunal (NCLT) process.

This is the second attachment in this case, with the total attachments now touching 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 chargesheets filed by the Central Bureau of Investigation (CBI).

According to ED, its probe revealed that the three promoters of DCHL – P K Iyer, T Venkatram Reddy and T Vinayakravi Reddy – manipulated the balance sheets of the company inflating the profits-advertisement revenue and grossly under- stated the financial liabilities of the company to paint a rosy picture for years to cheat banks.

“Balance Sheets of the company were fudged and loans taken from one Bank were hidden from other financial institutions. Over the years, M/s 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 M/s DCHL were diverted to extravagant projects and the diverted funds …were ultimately shown as losses,” ED said in a statement.

ED has alleged that a significant part of the loan was diverted into subsidiaries which did not do any legitimate business. They were also diverted into the proprietary concerns of Reddys without any proper accounting.

“It is also revealed that the accused promoters received hefty kickbacks from the investment made by M/s DCHL into M/s Odyssey at highly inflated values. The promoters ran the public listed company M/s DCHL like their proprietary fiefdom throwing all norms of corporate governance to wind. There were many suspicious donations to various Trusts,” the ED statement said.

The investigations also revealed that despite the initiation of the CIRP process, Reddys and their close family members continue “to yield indirect control over the print media and are working in senior capacities drawing large monthly salaries.”

The investigation agency claimed to have seized high-end vehicles which were registered in the name of DCHL from their possession. “The promoters were also found to be re-purchasing the mortgaged assets at discounted rates through private treaties by using concealed proceeds of crime through front company. The net amount of loss caused to the banks/NBFCs/ Financial Institutions is estimated at Rs 8180 Crore including the unpaid principal loan amount of approximately of Rs 3000 crore,” the ED statement said.

DCHL is currently under the CIRP process in which a resolution plan for only Rs 400 crore has been approved by the NCLT.

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