Home / Latest News / NCLT finally admits Canara Bank’s insolvency plea against Deccan Chronicle Group

NCLT finally admits Canara Bank’s insolvency plea against Deccan Chronicle Group

July 20, 2017

The Group has Rs 4,000-crore debt taken from a large number of banks and financial institutions.

NCLT                                                                                            Pic by indiatimes.com

On Wednesday, ending a 5-year long wait for the lenders of Deccan Chronicle Holdings Limited (DCHL), the National Company Law Tribunal (NCLT) ordered the appointment of an Interim Resolution Professional(IRP); besides imposing a moratorium on liquidation of the debt-laden media company.

Hyderabad bench was hearing an insolvency petition filed by Canara Bank under Section 7 of Insolvency & Bankruptcy Code(IBC), 2016. The public sector bank based its plea on claims that the firm had an outstanding loan of ₹723.75 crore.

Except in a few no. of cases where the lenders were able to take possession of certain properties of the company by invoking the Sarfaesi Act, the ₹4,000-crore debt taken from a large no. of banks & financial institutions remained largely unpaid ever since the company’s existing management disclosed the magnitude of its financial obligations for the 1st & the last time in the year 2012.

On 13th July, the NCLT bench comprising judicial member Rajeswara Rao Vittanala & technical member Ravikumar Duraisamy admitted Canara Bank’s petition seeking appointment of an IRP & the imposition of a moratorium on liquidating the company.

DCHL management had filed a counter affidavit in which it’d requested the NCLT bench to reject the Insolvency petition on certain grounds. The Media group had even cited an ongoing winding up case against this company in Hyderabad HC but to no avail.

Bench declined its request stating that there’s a prima facie case in what the lender had been claiming.

As per the provisions of the IBC, 2016, the interim resolution professional’ll take control of the defaulting company’s board till the resolution process is completed.

When asked if the company would be approaching the appellate authority against the today’s orders, a DCHL’s lawyer refused to make any comments. “We’ll be able to take a view only after going through the order copy, which is expected to be given tomorrow,” he said.

After some of its lenders started looking for a legal remedy for the recovery of loans from the company, the DCHL management admitted in an annual general meeting that it has more than Rs 4,000 crore loans to be repaid.

ICICI Bank and Srei Infra Finance emerged as the two largest shareholders after converting a part of debt into equity in the company.

However, DCHL continues to publish its popular English daily-Deccan Chronicle among its other publications.

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