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This article is more than 11 month old.

Enforcement Directorate attaches assets of promoters in DCHL alleged loan fraud case

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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.

Enforcement Directorate attaches assets of promoters in DCHL alleged loan fraud case
The Enforcement Directorate (ED) has provisionally attached immovable assets totaling Rs 122.15 crore of Deccan Chronicles Holding Ltd (DCHL) promoters in the alleged loan fraud case, under the Prevention of Money Laundering Act, 2002 (PMLA).
The assets belong to DCHL and two of its former promoters -- T Venkatram Reddy, T Vinayakravi Reddy and that of an alleged benami company floated by them.
Recently, DCHL was awarded over Rs 4,800 crore in a dispute against the Board of Control for Cricket in India (BCCI) over illegal termination of the company's Indian Premier League (IPL) franchise team.
Home Minister Amit Shah's son Jay Shah is the secretary at BCCI.
The immovable assets attached by the ED include 14 properties located in New Delhi, Hyderabad, Gurgaon, Chennai and Bengaluru. These assets are not covered under the NCLT process and these are the second attachment in this case.
Earlier, the ED had attached some more properties, which now takes the total assets attached to Rs 264.56 crore.
Investigations under PMLA were initiated by ED against DCHL and its management in 2015, based on six FIRs and a corresponding charge sheets filed by CBI, BS&FC, Bangalore.
Another chargesheet has been filed by CCS Police and a case has been filed by SEBI against DCHL. The alleged loan fraud committed by DCHL, as ED claimed in a press release amounts to Rs 8,180 crore. DCHL is currently under the CIRP process in which a resolution plan for Rs 400 crore has been approved by NCLT.
Investigation conducted under PMLA have claimed that the three promoters of DCHL -- PK Iyer, T Venkatram Reddy and T Vinayakravi Reddy -- allegedly hatched a conspiracy to manipulate the balance sheet of the company to inflate profits-advertisement revenue, and grossly under-state financial liabilities of the company to paint a rosy picture to allegedly dupe banks and shareholders.
Further, the ED alleged that balance sheets of the company were fudged and loans taken from a bank were hidden from other financial institutions. Over the years, DCHL availed credit facilities to the tune of more than Rs 15,000 crore.
Moreover, the ED claimed that a money trail investigation revealed that most of the loans were allegedly cyclically rotated into group companies and were diverted to pay older loans. Loans taken for working capital requirements and for business needs of DCHL were diverted to other projects.
The ED said that it has seized high end vehicles which were registered in the name of DCHL. Further, the law enforcement agency alleged that DCHL had re-purchasing mortgaged assets at discounted rates through private treaties by using concealed proceeds through a front company.
The net amount of loss caused to the banks, NBFCs and financial institutions, according to the ED is estimated at Rs 8,180 crore including unpaid principal loan amount of approximately of Rs 3,000 crore.
So far assets totaling to Rs 264.56 crore have been identified and provisionally attached under PMLA, the ED statement said. The central agency is conducting further investigations.