Crisis, bankruptcy, liquidation of companies are kind of stories that give fodder to newspapers. However, what if it happens to the newspaper itself? This is precisely what Deccan Chronicle Holdings Ltd has been facing for almost a decade now.
The Hyderabad-based publisher of the English-language daily, Deccan Chronicle, Financial Chronicle, and The Asian Age, and Telugu daily Andhra Bhoomi had already battled the worst crisis faced by an Indian media company in recent years. Along with this, the company is burdened with debt; its owners are facing fraud and forgery charges, it’s stock had drastically fallen during the last few years.
The Mumbai-listed company of 1930, was acquired by the Reddy family, in 1976 after the founders Rajagopal Mudaliar declared bankrupt. In recent years, DCHL had expanded beyond its home state of Andhra Pradesh and spread across India.
It all started when IFCI made a severe allegation in its petition that Deccan Chronicle Holdings had debt “running into thousands of crores of rupees,” putting the investors in shock. It also accused the publisher of defaulting on other liabilities and said it expected winding up petitions would be filed by other creditors.
The situation only worsed after this, as when Karvy Stock Broking Ltd (KSBL), on July 31, 2012, filed a petition against the Deccan Chronicle Holdings, stating that the promoters forged documents to misrepresent the total number of shares they held to raise loans. However, DCHL owners denied the same. The company was facing financial crises, and the situation got worse as the year passed.
In February 2015, T Venkatram Reddy, chairman of Deccan Chronicle Holdings Ltd (DCHL), and his brother and company vice chairman and MD Vinayak Ravi Reddy, were arrested by the Central Bureau of Investigation. It was alleged that they are involved in the Rs 357.77 crore fraud with Canara Bank. Later CBI confirmed that there were several other similar cases filed against them.
It was found that the total outstanding amount due to all the banks put together had crossed more than Rs 8,000 crore.
The total bank fraud which was charge-sheeted by CBI, involves ₹357.77 crore of Canara Bank, ₹225.77 crore of Andhra Bank, ₹72.61 crore of Indian Overseas Bank, ₹72.03 crore of Central Bank of India, ₹116.35 crore of Corporation Bank and ₹317.4 crore of IDBI Bank totalling to ₹1161.93 Crore.
Last August Enforcement Directorate (ED) had raided residences and offices of the promoters and had previously attached 19 immovable and movable assets worth ₹263 crores in 2017. ED revealed that there are various other fraud cases related to them, and the investigation is in process.
The appointment of Aditya Sinha as Editor-in-Chief of the Deccan Chronicle and Asian Age replacing AT Jayanthi earlier this year (August) brought another ray of hope, but all in vain.
Amidst the cases and internal changes, earlier this month, DCHL closed it’s Kochi edition, which was a small operation bureau when compared to others. Now it is reported that on December 27, they have officially closed their Bengaluru bureau as well, leaving employees with hopes as they might be shifted to other bureaus across India.
Last month the management had assured the employees that they would pay their dues and that Bengaluru edition would remain operational. Though, the course of action turned out to be opposite to what was assured never saw the result.
By having a good reach among the readers along with stories on civic issues, DCHL was able to create its unique identity among the media houses. Moreover, starting from 2009, the Bengaluru edition of the Deccan Chronicle had become a trusted brand in the city and one of the most profitable bureaus of the media house, which also owns the Asian Age and Financial Chronicle.
Despite all this, it promoters alleged fraud cases with banks, lender and other financial crises took a toll on DCHL.
The staff of DCHL stated that delay in the payment of salaries had been a recurrent problem and which forced many to leave previously. Some of the employees in the Bengaluru and Mumbai bureau had not been paid for nearly six months. This delay trend was seen for the past two years, wherein salaries were credited with a delay of about three months only after employees protested.
Employees of the Bengaluru bureau said that they were not given a heads-up about the closure, which is an add on to the non-payment of salary issue. Delay in salary had forced many of the employees to take other jobs such as delivery agents, cab drivers, or others.
With the current situation, employees feel that they have been unfairly treated even after giving their best to the organisation.