The ministry of corporate affairs (MCA) has constituted a core team to look into the alleged misreporting and squandering of funds by promoters in Hyderabad-based Deccan Chronicle Holdings Ltd (DCHL),an official source told The Indian Express.
The source said the team comprises officials from the serious fraud investigation office (SFIO),regional director of Hyderabad and officials of the ministry,and it will look into the inspection report being prepared by registrar of companies (RoC).
The team would look into all aspects of the report and will do its own investigation under section 209 A of the Companies Act,1956,after the preliminary inspection is done by the RoC, the official said.
The ministry ordered inspection of the books of accounts of DCHL after it received several complaints from the lenders of the company,alleging gross mismanagement by the promoters of the firm.
The estimated debt contracted by the promoters up to June 30,2012 is in excess of Rs 4,300 crore,according to the lenders including Canara Bank. According to financial services secretary DK Mittal,the total exposure of banks to DCHL stands at around Rs 5,000 crore,of which exposure of public sector banks alone is around Rs 3,800 crore.
The government has already asked Canara Bank to conduct a forensic audit of the accounts of the company. The banking division under the finance ministry will also study the risk of systemic failure in DCHL.
The Hyderabad-based firm runs several newspapers,including the Deccan Chronicle,Financial Chronicle and the Asian Age. It also has a controlling stake in the Deccan Chargers cricket team. It has not been able to pay the salaries to the players forcing the BCCI to look out for a prospective buyer.