Lending a Hitchcockian twist to the saga of Deccan Chronicle Holdings Ltd, ICICI Bank on Friday disclosed that the promoters of the Hyderabad-based doddering media company had pledged about 6 crore shares with it.
Interestingly, the bank has disclosed this 13 days after it happened on July 28, 2012.
More interesting, however, is that this math doesn’t add up and creates even more confusion about the actual holding of the promoters of the company.
Deccan Chronicle has three promoters – T Venkattram Reddy, T Vinayak Ravi Reddy and P K Iyer – each holding about 5.14 crore shares or about 24.61% of the company equity apiece.
Together, that’s a 73.83% stake.
Now on July 26, 2012, the promoters in separate disclosures informed the stock exchanges that they had created a pledge in favour of Future Capital Holdings Ltd through the creation of an encumbrance on about 3.76 crore shares each, leaving them with another 1.38 crore shares each.
Now, the ICICI Bank disclosure claims that the promoters had pledged 2 crore shares EACH on July 28, 2012.
If the total shareholding left after the July 26 pledge to Future Capital was 1.38 crore shares each, how did they pledge 2 crore shares EACH two days later on July 28?
Again, on July 30, 2012, there was also a disclosure from Religare Finvest informing the stock exchanges that about 3 crore shares totalling about 14.46% of the company’s equity was pledged with them. However, the disclosure did not explain if the shares were owned by the promoters.
According to the information provided by Future Capital, the promoters of DCHL had raised about `170 crore by pledging their shares. However, for reasons that have not put into public domain, Future Capital, which was going into the control of Warburg Pincus, had transferred the Deccan Chronicle loan to the Future promoter Kishore Biyani. Accordingly, the responsibility of DCHL shares’ pledge is with Biyani and not Future Capital as an entity.
With each of the pledges giving out a different number on the shares coming under encumbrance, analysts see the issue affecting various intermediaries including 3i Infotech, which has made the disclosure on behalf of ICICI Bank on Friday.
Karvy Stock Broking Ltd has already filed a complaint with the Central Crime Station (CCS) in Hyderabad alleging that the promoters of DCHL had indulged in misrepresentation, forgery, breach of trust and cheating by acts of omission and commission in representing the actual shares they hold in their depositary accounts. The complaint is still being investigated by the police.
According to Karvy’s complaint with the CCS, on July 2 and 3, 2012, the promoters of DCHL asked Karvy to pledge a part of the free shares in favour of IDFC Ltd and the same was executed with a belief that the shares were free from any encumbrance. However, the complaint did not disclose the number of shares that were offered to IDFC by the promoters nor there is any disclosure from IDFC so far on the pledge.