The Economic Offences Wing of the Delhi Police has registered a case against Deccan Chronicle Holdings Ltd (DCHL), besides its chairman and directors for allegedly cheating a Hong Kong-based company and its Indian agent.
The company has been accused of not making payments to the tune of Rs 125 crore for the newsprint supplied to it on credit during 2011-12.
The complaint has been lodged by Delhi-based Praveen Vijh Associates Pvt Ltd against DCHL, which has its headquarters at Secunderabad in Andhra Pradesh; its Chairman T. Venkataram Reddy; vice-chairmen T. Vinayak Ravi Reddy and P.K. Iyer; and directors G. Kumar and V. Suresh.
‘Expansion of business’
The complainant company operates as an agent and service provider for Hong Kong-based Adonis Ltd.
According to the complaint, Adonis supplied newsprint to DCHL on its orders and demand and till August-September 2011, DCHL adhered to the terms of the supply. “During the initial period of 2011, accused persons tried to expand their business by entering into diverse fields which were not their core competency and consequently, suffered heavy losses… to get liquidity and to save the group, in or around August-September 2011, all accused persons entered into a criminal conspiracy the object of which was to deceive and cheat Adonis and us…. they started placing huge orders to Adonis through us for supply of newsprint on credit, which raised suspicion,” stated the FIR.
When the suppliers hesitated to supply such a huge quantity of newsprint on credit, the accused induced them into believing that they were in a sound financial position with a turnover of over Rs 20,000 crore.
The accused persons showed various documents to Adonis representatives to prove their claim, alleged the complaint.
Accordingly, the complainant company supplied newsprint worth about Rs 125 crore to DCHL between September 2011 and April 2012.
While the payment was to be made within 60-90 days from the date of shipment, the complainant alleged that no payment was made to Adonis after receipt of the newsprint.
‘Dishonest intention’
The FIR further alleged that the accused persons harboured dishonest intention to earn profit out of the supplied newsprint and at the same time, not to pay the amount due to Adonis.
“When the accused persons failed to make the payment to Adonis, we started making enquiries and came to know that in the middle of 2011, DCHL and its subsidiaries were debt-ridden companies and the accused persons had suffered heavy losses in their business expansion programmes.
“In order to get the liquidity, huge orders of newsprint were placed on us, for which they never intended to pay to Adonis,’’ alleged the FIR.
Efforts to contact the Deccan Chronicle management in Hyderabad for its comment on the issue did not yield result.