 "The Chronicle of a sudden death")
What brought about the fall of the high flying businesses of Deccan Chronicle?
A report in Business Standard says the root cause is its expensive ventures into non-core areas such as niche aviation and IPL. The report also adds a tangy political twist to the rise and fall of the Reddys.
The sorry state of affairs at the company came to light with IFCI filing a winding up petition after Deccan Chronicle defaulted on NCDs. In the petition, the financial institution alleged the company was insolvent.
[caption id=“attachment_409030” align=“alignleft” width=“380”]  AFP[/caption]
But soon more skeletons stumbled out as an FIR alleged the promoters, including high profile T Venkattram Reddy who has a fleet of Bentleys, pledged the same shares with Future Capital and Karvy Stock Broking.
Even as the dispute raged, the company raised Rs 880 crore from various banks. Why has the company raised such a huge sum even as no expansion was on the cards for its newspaper business?
The aviation foray of the company is altogether a different story. Aviotech, the group company engaged in the sector, has been kept completely out of the flagship’s balance sheet.
Aviotech was the second attempt at aviation, after Flyington Freighters got caught in slowdown jitters, the report said.
Both the companies had placed orders for 10-12 aircraft each, but both these orders were in the middle of payment disputes.
Impact Shorts
More ShortsAnd adding political twist to the “spectacular collapse” is the Jaganmohan Reddy link.
On 5 July, Deccan Chronicle carried an exclusive interview of Jagan’s mother YS Viajaylakshmi, saying her party, YSR Congress, would trounce the Congress in 2014 elections.
Read the full article here.
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