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Four private sector lenders are likely to form a consortium to collectively initiate legal action against Deccan Chronicle Holdings over defaults and delays in repayments. These lenders are ICICI Bank, Axis Bank, IDFC and Religare Finvest.
At present, talks are on between the lenders and the consortium is expected to crystallise soon. However, there is no clarity on whether public sector banks will join the planned consortium .
“The consortium, once finalised, will chalk out an action plan. It will give a better direction to lenders to settle the default cases,” an official said.
Individually, the lenders have already taken Deccan Chronicle Holdings to various courts over defaults and other issues. “The idea behind a consortium is to pool resources and make the legal fight against Deccan more potent,” another official said.
The proposed consortium will also drag the beleaguered company to the Company Law Board. “The lenders also want the Government to take cognizance of this case and initiate action. Since stakes are high in terms of loans given by banks and other financial institutions to Deccan Chronicle, action is being planned both at judiciary and executive level,” the official said. ICICI Bank is Deccan’s biggest lender with an exposure of about Rs 490 crore , followed by Axis Bank, Canara Bank and Andhra Bank.
A Chandigarh court has already issued non-bailable warrants against the directors of Deccan Chronicle Holdings, after they failed to appear before the court on March 23 in connection with a cheque bounce case.
Bailable warrants were earlier issued against the directors after four cheques issued in favour of Religare Finvest bounced. While DCHL’s directors wanted the non-bailable warrants to be quashed, the Chandigarh court has directed them to appear before it on May 18. Deccan Chronicle had issued two cheques dated July 1, 2012 and another two cheques dated August 1, 2012 amounting to Rs 6 crore in favour of Religare Finvest.
A First Information Report and a criminal case under Section 138 of Negotiable Instruments Act were filed after the cheques bounced. After a complaint was also filed in a Chandigarh court, summons were issued against all directors of DCHL, including Vice-Chairman-cum-Director & Authorised Signatory P. K. Iyer, besides Tikkavarapu Vinayak Ravi Reddy, Menakuru Sukumar Reddy, Karthik Iyer Parasuraman, Pendyal Siddhartha and Venkaparamani Suresh.
Net loss
Disclosing the company’s audited financials for the 18 months period ended September 2012, DCHL had said in January that it suffered a net loss of Rs 1,040 crore on a revenue of Rs 843 crore for the 18 months period ended September 2012.
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