DCHL promoters’ property price Rs 122 crore connected in mortgage fraud case: ED

Mukesh Ranjan
Tribune News Service

New Delhi, October 16

The Enforcement Directorate (ED) on Friday said it has issued a provisional attachment order under Prevention of Money Laundering Act (PMLA) to seize assets worth Rs 122.15 crore of the promoters of the Deccan Chronicle Holdings Ltd (DCHL) in a loan fraud case involving a consortium of banks.

The ED in an official statement said the attached assets belong to the DCHL and two of its former promoters — T Venkatram Reddy and T Vinayakravi Reddy and an alleged benami company floated by them.

According to it the immovable assets consist of 14 properties located in New Delhi, Hyderabad, Gurgaon, Chennai, and Bengaluru. This is the second attachment in this case, the ED said, adding that with this, the total amount of assets attached in the case so far has come to Rs 264.56 crore.

The ED had initiated investigation against DCHL and its management based on six FIRs and CBI chargesheet filed in Bengaluru in 2015. Another chargesheet has been filed by police and a prosecution has also been filed by SEBI against DCHL.

“The total loan fraud committed by DCHL and its promoters is estimated to be Rs 8,180 crores. Investigation conducted under the PMLA revealed that the three promoters of DCHL— PK Iyer, T Venkatram Reddy and T Vinayakravi Reddy — hatched a well-planned conspiracy and manipulated the balance sheets of the company inflating the profits, advertisement revenue and grossly under-stated the financial liabilities of the company to paint a rosy picture for years to cheat the banks and its shareholders,” the ED alleged in its statement.

The ED also claimed in the statement that the balance sheets of the company were allegedly fudged and loans taken from one bank were hidden from other financial institutions.

“Over the years, DCHL availed credit facilities to the tune of more than Rs 15,000 crore. Money trail investigation revealed that most of the loans were cyclically rotated into group companies and were diverted to pay back older loans. 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,” the ED said,

The promoters were allegedly also found to be re-purchasing the mortgaged assets at discounted rates through private treaties by using concealed proceeds of crime through front company, it said, adding that the net amount of loss caused is estimated at Rs 8,180 crores, including the unpaid principal loan amount of approximately Rs 3,000 crores.

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