The News Minute | February 14, 2015 | 7.00 PM IST
Deccan Chronicle owner T. Venkattram Reddy was questioned and arrested by a team of the Central Bureau of Investigation from Bengaluru on Saturday in relation to a Canara Bank fraud case.
Sources in the CBI alleged that the agency had found evidence that the DC promoters had "deliberately hatched a conspiracy to cheat and cause a loss to a tune of Rs 1,230 crore to the Canara Bank over a period of four years, from 2008 to 2012". "As this is a public sector bank, the DC has swindled the public money," a CBI official said.
Last year the CBI had filed a case of cheating, fraud and criminal conspiracy against Deccan Chronicle Holdings chairman T. Venkattram Reddy, vice-chairman and managing director T. Vinayak Ravi Reddy , vice chairman P.K. Iyer as well as the company's auditors C.B. Mouli & Associates.
The RBI had also fined 12 banks Rs 1.5 crore for not following proper guidelines in advancing loans to the DC group which had defaulted to the extent of Rs. 4000 crore.
What was unusual about the loans was that these advances were not backed by enough security. The mortgaged assets were expected to fetch only a third of the loan exposure. Secondly, most of the lenders were unaware of the extent of leverage by the company and the exposure of other lenders to the group. Sources said that the RBI was shocked that advances were made by lenders without speaking to each other.
In July, Canara Bank had said that DC's promoters had approached the bank for restructuring their loan. However, the bank had then asked for a one-time settlement as the promoters might not be in a position to meet the huge funding requirement.
Canara Bank had filed several cases against DCHL management to recover dues, including a winding-up petition which is pending before the Telangana and Andhra Pradesh high court.