Concast drags Deccan to court over default

It’s befuddling – the number of entities the now-cash-strapped Deccan Chronicle Holdings had taken loans from, only to default.

And these weren’t all banks. The Reddys had also taken loans from diverse business houses across the country, some of which have had to seek legal recourse for recovering their monies.
The second such name to emerge is that of Concast group, headed by Sanjay Sureka, which has a fledging steel manufacturing business based out of West Bengal and also cement in the northeastern states.

Earlier, PVP Capital Ltd, a Tamil Nadu-based non-banking finance company, had approached the Chief Metropolitan Magistrate court of Hyderabad with a bounced cheque of Rs20 crore issued by a privately held company operated by Deccan Chronicle’s chairman T Venkatram Reddy.

The Concast group had through its arm Concast Cement extended a rather small sum of Rs15 crore to Deccan Chronicle Holdings Ltd.

The repayment cheque for that money, first issued in June, was dishonoured for insufficiency of funds.

A peeved Sureka then approached Calcutta High Court.

The court on December 17 ordered Deccan Chronicle to maintain a minimum balance of Rs15 crore at the Secunderabad branch of ICICI Bank. It also directed Deccan Chronicle to deposit the proceeds of Rs125 crore from sale of immovable property in that bank account.

To be sure, a number of lenders have already dragged the beleaguered media house to court over defaults. While several of them, including the Future group, have got restraining orders against asset sale by Deccan, ICFI has initiated a winding up case.

Yes Bank, which had extended about Rs194 crore of loans to Deccan, had issued a notice last month recalling the entire outstanding. Its effort, including approaching the Debt Recovery Tribunal, didn’t yield any result.

ICICI Bank is Deccan’s biggest lender with an exposure of about Rs490 crore, followed by Axis Bank, Canara Bank and Andhra Bank.