WATCH: Former Deccan Chronicle Chairman Venkatrami Reddy Arrested

Hyderabad: Former chairman and promoter of Deccan Chronicle Holdings Limited (DCHL) T Venkatram Reddy was arrested by the Enforcement Directorate (ED) in the early hours of Wednesday, June 14, in connection with a money laundering case. The ED also arrested DCHL’s former director K Iyer and auditor Mani Oommen. According to the probe agency, Reddy and others had defrauded certain banks by submitting fake documents. ED officials had questioned Venkatram Reddy and the two others on Tuesday, before arresting them the next day.

In October 2020, ED had attached assets belonging to DCHL and its former promoters Venkatram Reddy and his brother T Vinayak Ravi Reddy worth over Rs 122 crore under the Prevention of Money Laundering Act, in connection with the alleged bank loan fraud case. At the time, ED had said that the total loan fraud committed by DCHL and its promoters is estimated to be Rs 8,180 crore.

Venkatram Reddy is also accused in several similar loan fraud cases by the Central Bureau of Investigation (CBI). In 2015, Venkatram Reddy was arrested by CBI in connection with the alleged default of a Rs 357 crore loan from Canara Bank. The CBI case against DCHL was registered based on a complaint from Canara Bank, Bengaluru, over non-repayment of loans, earlier in July 2013. Venkatram Reddy was arrested in 2015 after CBI refused DCHL’s plea to restructure the loan. The CBI has registered six FIRs against Venkatram Reddy and DCHL since 2013 over charges of cheating and criminal conspiracy.

Venkatram Reddy and DCHL’s auditors have been accused by CBI of cheating Canara Bank with falsified financial statements and hiding information about their borrowings from other banks. Canara Bank’s Secunderabad branch too had lodged a complaint against DCHL over the non-repayment of Rs 1,230 crore of a loan. The bank had alleged that Venkatram Reddy and DCHL used its short-term corporate loans for personal use and purposes other than those mentioned at the time of availing the loans.

Other financial institutions have also lodged complaints against DCHL’s promoters over the years, for non-repayment of loans worth hundreds of crores. DCHL is said to have invested some of these funds in the now-defunct Indian Premier League (IPL) team Deccan Chargers.

In October 2020, the ED had attached 14 properties located in Delhi, Hyderabad, Gurgaon, Chennai, Bangalore and a few other places that belong to DCHL and its former promoters including Venkatram Reddy. According to PTI, the agency had alleged that its probe found that “the three promoters of DCHL namely PK Iyer, T Venkatram Reddy and T Vinayak Ravi Reddy hatched a well-planned conspiracy and manipulated the balance sheets of the company inflating the profits [from] advertisement revenue and grossly understated the financial liabilities of the company to paint a rosy picture for years to cheat the banks and its shareholders.”

“Despite the initiation of the insolvency resolution process, the accused promoters 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 ED had alleged. It said the balance sheets of the company were fudged and loans taken from one bank were hidden from other financial institutions.

“Loans taken for working capital requirements and for business needs of DCHL were diverted to extravagant projects and the diverted funds which were so invested into new projects without the consent of the banks and were ultimately shown as losses,” ED alleged.

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