The Central Bureau of Investigation (CBI) has registered case of cheating and criminal conspiracy against newspaper publishing company Deccan Chronicle Holdings Limited chairman T. Venkatarami Reddy.
The CBI has registered the case under Sections 120-B read with Section 420, 468 and 471 of the IPC based on a complaint lodged by the Canara Bank in connection with the "fraud" perpetrated at its prime corporate branch, Secunderabad. Cases under the same sections are also registered against DCHL vice-chairman, managing director and its auditors.
Open cash credit limit
The CBI said it was alleged in the FIR registered against DCHL that during 2009-11, accused entered into a criminal conspiracy to cheat Canara Bank, Secunderabad branch. In furtherance of this, they had availed Open Cash Credit limit with periodical enhancements and multiple short term corporate loans aggregating to Rs. 1,230 crore (approx) from the bank, thereby availing excessive bank finance without adequate drawing power by allegedly submitting false and fabricated financial statements and by suppressing the borrowings taken from other banks.
According to a CBI release, it was also alleged that the accused utilised the Short Term Corporate loans for purposes other than for which they were sanctioned by fraudulently diverting the proceeds of various credit facilities. They did not repay the credit limits as also the investments aggregating to Rs. 20 crores made by the bank in Non Convertible Debentures of the company.
The release said it was further alleged that the company had submitted false & fabricated balance sheets concealing its actual borrowings from Canara Bank and other banks besides alienating the security hypothecated / mortgaged to Canara Bank. The total loss allegedly caused to Canara Bank was to the extent of Rs.357.77 crores as on September 8 last year.
The CBI had accordingly conducted searches at the office premises of the firm (DCHL) and the residential premises of the accused. Further investigation was on into the issue.