Stuck with a bad loan of Rs 444 crore, IDBI Bank has been unable to sell Deccan Chronicle trademarks which were pledged for the loan.
Courts have once again put a spanner on lender's efforts to recover money from erring defaulters.
Stuck with a bad loan of Rs 444 crore, IDBI Bank has been unable to sell Deccan Chronicle trademarks which were pledged for the loan.
According to a source, IDBI Bank did not receive any bids for its auction of the trademarks of four newspapers of Deccan Chronicle holdings following a court intervention.
The promoters of Deccan Chronicle Holdings, who are also part owners of the trademarks, moved the Calcutta High Court to block the sale just days prior to the auction. The reserve price for the four trademarks for the Hyderabad-headquartered media group was Rs 144.5 crore.
A senior IDBI official said, "We did not get any bids. We will review the process and see what needs to be done."
A source close to these developments said, "Bidders may have been put off by the Calcutta high court order which asked the bank not to confirm the sale until the case is disposed off. The promoters had filed the case to block the sale of its trademarks only four days prior to the auction date. No bidder wants to get into litigations".
The company had pleaded that if the trademarks are sold off, then the business would be in jeopardy and derail the efforts that the promoters are taking to repay the bank's dues.
Though the owners T Venkattram Reddy and his brother Ravi Reddy are fighting a number of legal battles, all the publications are being published without any interruption and the group has also managed to retain its staff.
The bank had fixed a reserve price of Rs 120 crore for the Deccan Chronicle trademark, Rs 3.5 crore for Andhra Bhoomi, Rs 18 crore for The Asian Age and Rs 3 crore for Financial Chronicle. The trademarks are owned by Deccan Chronicle Holdings (DCHL) and also promoters.
IDBI, which had advanced over Rs 444 crore to DCHL against the trademarks, had made a similar attempts earlier to put the trademarks on the block but other lenders like Axis Bank and Kotak Mahindra Bank had raised objections as they also had unpaid dues from the company. IDBI Bank then prevailed upon the other banks asking not to block their recovery efforts so that the sale goes through and once the sale takes place the lenders can discuss on apportioning the proceeds.
In July 2014, RBI had fined 12 private sector and public sector banks for not following the prudential guidelines for sanctioning the loans to the group.
Deccan Chronicle, which owes banks over Rs 4,500 crore, is already declared a fraud by a dozen banks as they are not able to trace the end use of the loans.
Hemant Kanoria, head of Srei Infrastructure which owns about 24% in Deccan Chronicle holdings, had planned a revival strategy for the group by getting in a media expert to run the media business but that plan got into litigations. But a banker said, "Nothing concrete was received from any borrower for the lenders to discuss and take it forward."
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