The National Company Law Tribunal (NCLT)’s Hyderabad bench will give its ruling on the liquidation of the Deccan Chronicle Holdings Limited (DCHL) that run English dailies Deccan Chronicle, Asian Age, Financial Chronicle and Telugu daily Andhra Bhoomi, on 17 July, Tuesday. It will be clear whether the newspaper major will be wound up or handed over to a new management for revival.

The company is in the insolvency resolution process under the Insolvency and Bankruptcy Code (IBC) for the last two years. Before that, the DC group had faced a prolonged trail at the Debt Recovery Tribunal bench in Hyderabad, as over a dozen public and private sector banks and other private money lenders have filed cases against it.

The ruling of the NCLT bench headed by Ratakonda Murali will have nationwide significance as this will be a major case under the new IBC that came into force in the country two years ago and the promoters of the company face a clutch of criminal cases and a CBI probe too. At the same time, the DCHL is being treated as a “going company”—which means a running company that generates some assured turnover and specified liquid assets—by the Insolvency Resolution Professional (IRP).

IRP Mamata Binani, appointed by the NCLT, has worked out a detailed plan for the revival of the DC group, but failed to secure the mandatory 66% support from the lenders, who formed a committee of creditors (CoC).  Binani put her revival plan for e-voting before the 35 member CoC from 11-12 July, but only 55.08% of them backed it. If a revival plan fails, as per the IBC, liquidation is the logical next step to recover the dues from the company.

As per sources from the CoC, which includes public and private bankers, the IRP’s revival plan included a bid from Srei Infrastructure Finance Limited, a Kolkata-based company with over three decades standing in infrastructure and investment finance, with a promise of investment of Rs 850 crore. Later, the Srei is understood to have submitted a revised plan of investment of around Rs 1,000 crore.

This amount is meagre in view of the DCHL’s piled up debts of around Rs 6,500 crore, but the IRP is learnt to have been satisfied with the pro-employees’ stand of the Srei, which has around 77,000 employees on its rolls. Srei, which holds equity in the DC, is also viewed by some bankers that, it was a proxy to the beleaguered promoters—T. Venkattram Reddy and T. Vinayak Ravi Reddy.

According to sources from public sector Canara Bank, a major lender with around Rs 330 crore debt to DC and the first complainant to the CBI, the Srei’s plan woefully falls short of the minimum amount needed to clear the debts of the company, leave alone revive it. “The amount specified in the IRP’s plan was too small, so we had rejected it,” said a source from Canara Bank on the condition of anonymity.

Binani, who refused to comment on the tussle on Friday, simply maintained that the entire issue would be placed before the NCLT, to which she is accountable, and the tribunal would decide the fate of the DCHL. Sources close to Binani told this newspaper that her major concern was to protect the interests of around 1,400 employees who depend on the DCHL’s businesses.

That is the reason why she was treating the DC group as a “going concern”. It might not be proper to sell off its assets like in the case of a closed unit as the livelihood of employees would be affected. The NCLT’s decision is awaited on this.

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