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Updated: September 12, 2012 09:43 IST

Deccan Chronicle under forensic audit: Mittal

PTI
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Financial Services Secretary D. K. Mittal. File photo: Kamal Narang
The Hindu Financial Services Secretary D. K. Mittal. File photo: Kamal Narang

Banks’ exposure to the group stands at Rs.5,000 crore

Canara Bank is conducting forensic audit of the accounts of troubled Deccan Chronicle Holdings Ltd. (DCH), which runs a media group and owns an IPL cricket team, Financial Services Secretary D. K. Mittal said here on Tuesday.

Mr. Mittal said the bank would “see if there are any faults and discrepancies” in DCH. The government would also study the risk of systemic failure in the case of DCH as banks exposure to the company stood at around Rs.5,000 crore, he added.

“The government is aware of the Deccan Chronicle Holdings Ltd (DCH) situation. It wants to study systemic failure in the case of DCH,” he said.

DCH, the owner of IPL franchisee Deccan Chargers, has not been able to pay the salaries to the players, forcing the Board of Control for Cricket in India (BCCI) to look out for a prospective buyer. Shares of Deccan Chronicle Holdings closed at Rs.12.25 on Tuesday, down 7.62 per cent over previous close on the BSE.

Meanwhile, the Registrar of Companies (RoC) has initiated a preliminary scrutiny of the books of DCH. “The case is being looked at a preliminary stage by the RoC,” Secretary at Ministry of Corporate Affairs Naved Massod said.

In June, the Deccan Chronicle group had appointed Religare Capital Markets to advise it on selling of Deccan Chargers following approach “by multiple parties evincing interest in acquiring stake in the company’s IPL team.’’ However, according to investment banking sources, financial liabilities of the franchise owner pushed away the prospective buyers, and the matter had been intimated to the cricket board.

The Deccan Chronicle group had acquired the franchise for $107 million (about Rs.588 crore) in 2008.

Debt rejig plan

Meanwhile, the company said its board had passed a resolution on asking the Corporate Debt Restructuring Cell to rejig its existing debt.

“The board of directors of the company, at its meeting held on September 7, has passed a resolution to restructure the existing debt of the company by an application to the Corporate Debt Restructuring (CDR) Cell under CDR mechanism as envisaged under the Reserve Bank of India guidelines,” the company said in a filing to the BSE.

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