Deccan may have bent rules while borrowing: Banking sources

The Deccan Chronicle saga appears to be more than just a case of a company that has loaned too much. There are allegations that the company may have broken rules. One of the big lenders told CNBC-TV18 that the company may have pledged the same collateral to several lenders. CNBC-TV18's Gopika Gopakumar and Appaji Reddem report.

There is more to the Deccan Chronicle story than meets the eye. Bankers have told CNBC-TV18 that the media company has raised loans from several lenders against the current assets pledged with Canara Bank. This has been done without taking a no objection certificate from Canara Bank. It is still unclear how much debt the company has raised against this common security. But it is likely that Canara Bank will look into these issues while doing the forensic audit of the company. Meanwhile, Deccan Chronicle came for discussion at the CDR meeting held today.
The company has sought to restructure Rs 2346 crore of debt under the CDR cell. The company owes a total of Rs 4100 crore to 14 lenders. These include ICICI Bank with an exposure of Rs 500 crore, Axis Bank Rs 400 crore, Canara Bank Rs 350 crore, IDBI Bank Rs 250 crore, Andhra Bank Rs 200 crore and YES Bank Rs 173 crore.
ICICI Bank, the largest lender, has also made the formal application today to refer Deccan Chronicle holdings to the CDR cell. The company is however awaiting the mandate from other lenders before it could be officially admitted for restructuring.
But tomorrow is the big day for Deccan Chronicle when it's much prized asset Deccan Chargers will be up for bidding. But this has got mired in legal wranglings after Tim Wright, former CEO of Deccan Chargers, sought an injunction asking for stalling the sale till the promoters pay him Rs 100 crore.