NCLT to initiate insolvency process against Deccan Chronicle group

HYDERABAD: In a fresh round of trouble for the beleaguered media group Deccan Chronicle Holdings Limited, the Hyderabad bench of National Company Law Tribunal (NCLT) today accepted a plea by the Canara Bank, seeking initiation of insolvency resolution process and has asked the bank to appoint an interim resolution professional (IRP).

Sources in the bank said that they are in talks with the big four accounting firms- Pricewaterhouse Coopers, Ernst & Young, Deloitte and KPMG to be appointed as an IRP. Further, the tribunal assigned July 11 as the hearing date for deciding the moratorium period.

Dishit Bhattacharjee, standing counsel for Canara Bank said, “The tribunal admitted our application under Section 7 of the Insolvency and Bankruptcy Code 2016 as we were able to establish that the company has substantial debt on its books and has defaulted on the payments.” The bank had filed an application before the tribunal in February this year.

Deccan Chronicle, which publishes dailies namely Deccan Chronicle, Financial Chronicle, Andhra Bhoomi, has defaulted on a loan of nearly Rs 700 crore. Other lenders like ICICI Bank, Seri Infrastructure etc., among others are also likely to make a claim for resolution.

“Once the IRP is appointed, it will call for a creditors meeting to pass a resolution on whether to revive the company or look for other options including insolvency. It can then dissolve its assets proportionately among the lenders. The company directors, meanwhile, will have no say in the operations,” said a company law expert, adding that the promoters can file appeal before the National Company Law Appellate Tribunal (NCLAT) in New Delhi against the NCLT’s order.

The move could spoil the company’s plans which was planning to raise funds from Manoj Mohanka, former chairman of Network 18 Media and Investments as reported by ET earlier.