Deccan Chronicle and Asian Age newspapers shutting shop? Huge debt keeping buyers away?

Are Deccan Chronicle, Asian Age shutting shop?

Are Deccan Chronicle, Asian Age shutting shop?
Are Deccan Chronicle, Asian Age shutting shop?

The debt-ridden Deccan Chronicle and Asian Age newspapers are facing their worst crisis due to the controversies involving money laundering, bank frauds and siphoning allegations faced by its’ earlier owners, the Reddy brothers. In December month itself, Deccan Chronicle has shut the editions in Kerala and Karnataka states. The newspaper group based in Hyderabad has already shelved its business newspaper Financial Chronicle and the buzz in the market is that it is going to stop the operation of Asian Age newspaper’s Mumbai based operations.

For the past two decades, the Deccan Chronicle Group was run by Andhra Pradesh Congress heavyweights former Union Minister T Subbirami Reddy’s nephews T Venkatram Reddy, T Vinayak Reddy, and the newspaper are still the No: 1 in Telangana and Andhra Pradesh. Due to the patronage of the Congress party, especially the tainted corrupt former Finance Minister P Chidambaram and Congress Treasurer Ahmed Patel, the Deccan Chronicles Holding Limited (DCHL) was getting all sorts of bank money during Congress regime. During the UPA period, Editor M J Akbar floated newspaper Asian Age which was acquired by the Group at a fancy price and it even started a London edition. That time Akbar was supported by fugitive Vijay Mallya. It is interesting note that most of the sexual abuse allegations by lady journalists against Akbar happened during his Asian Age days.

Reddy’s faced first problem surfaced in late 2013 when Banks started crying about non-repayment for funds crossing Rs.7500 crores. The money plundering started in mid-2007 when the flamboyant Reddy brothers started intervening in IPL cricket and bought the Deccan Chargers team and private jets. After the BJP-led NDA regime, the Reddys were arrested by CBI and even arrested by the Delhi Police for trying to kill the whistleblower who alerted the agencies of their money laundering.

After the arrest of the promoters, the company DCHL with more than Rs.7500 crores faced cases in National Company Law Tribunal. When the company was put up for auction, nobody was ready to take up the debt sunken firm and at last, it was sold for around Rs.400 crores to a Kolkata based firm SREI’s fund management firm[1]. Times of India Group also tried to appear in the auction.  The SREI Group was not at all interested in running the newspapers and was only keen on the other businesses of DCHL. The reason suggested by the new buyers was the high cost of running newspapers.  But the Reddy brothers and Congress leaders promised their support in running the newspaper in covert ways. All the promises collapsed after the Enforcement Directorate (ED), Banks and other agencies started demanding their actual dues which is more than Rs.7000 crores, plundered by the promoter Reddy Brothers.

It was an open secret that though SREI had taken over the firm, the Reddy brothers and Congress leaders were arranging “bag cash” to run the affairs of the newspaper. But the Demonetisation and subsequent Digitisation of transfer of funds through banks collapsed the operation of running the newspaper in covert ways through “bag cash”. The last hit from the ED, which in August 2019, unearthed the dubious and covert ways of cash handing by the Reddy Brothers[2].

It is learned that new management SREI has decided to shut the shop, if the old owners Reddy Brothers are not funding the newspaper business. Though SREI approached many new buyers to handle the newspaper and media division, due to huge debts and ongoing criminal and money laundering cases, no one is ready to touch the newspaper business, which was offered at Rs. One as sale value with the responsibility of the new buyer to handle the dues.

Last heard that the new buyers are only interested in Telangana and Andhra Pradesh operations of the Deccan Chronicle, where they are the No: 1 newspaper. According to certain industrialists, new buyers (still buyers have not shown their hand) are still assessing the huge debts already caused by the Group. At one-point the Times of India Group promoters Jain Brothers showed interest in taking over Deccan Chronicle Group. But the huge Debts created by Reddy Brothers made them to change their mind.  So, it is widely believed that in coming days the Deccan Chronicle Group will be on shutting their shops in many States and will try to consolidate only in their home turf Telangana and Andhra Pradesh states.

References:

[1] NCLT accepts SREI plan for Deccan ChronicleJun 4, 2019, The Economic Times

[2] Bank loan fraud: ED raids DCHL, uncovers 5 lakhsAug 23, 2019, The Economic Times

Team PGurus

4 COMMENTS

  1. The DCHL scam is a classic example if how the nehru dynasty and its henchmen abused PSU banks. Billions were given as loans without any collateral security. THIS MONEY WAS TAKEN OUT OF INDIA AFTER CONVERSION INTO FOREX AND PARKED IN FOREIGN BANKS. The Centre should confiscate the personal assets of DCHL owners.

  2. T. Subbarami Reddy, Honorable Rajya Sabha MP and brothers earned amassed more currency paper and notes in the name of running a newspaper. Agencies must investigate where the money is spent or parked and confiscate assets

  3. I am at shock,how Nationalized Banks can lend over 7000 cr to DHCL without secured assets? Was Govt nationalized private banks which were running efficiently & professionally just to loot public money by lending scrupulous promoters close to ruling party? God only can save all PSUs under Central & State Govt.

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