Deccan Chronicle approaches BIFR

DCHL management admit to be having debt pile of close to Rs 4,000 crore

Hyderabad-based media company Deccan Chronicle Holdings Limited (DCHL), which is facing the Central Bureau of Investigation (CBI) investigation into the alleged financial irregularities by its management, has approached the Board for Industrial and Financial Reconstruction (BIFR) seeking a bailout under the Sick Industrial Companies (Special Provisions) Act of 1985.

The company on Wednesday informed the BSE that the board of BIFR had registered its reference under Section 15(1) of the Act. It received a communication from the BIFR yesterday, according to the BSE filing.

The DCHL management had admitted to be having a debt pile of close to Rs 4,000 crore long after a number of lenders initiated legal action to recover loans given to the company. However, it failed to explain as to where these loan money had gone prompting Canara Bank to file a complaint with the CBI.

Under Section 15(1) of the sick units Act, the board of directors of any company can approach the BIFR for the determination of the measures to be adopted if they think that the company has gone sick.

This the management can do within 60 days from the date of finalisation of the audited accounts for the financial year at the end of which the company became sick or within 6 months after it has formed an opinion that the company has become sick.

The BSE filing did not explain as to when the DCHL management decided that the company had become sick. The company had announced the financial results for the quarter ending March, 2013, in June when it had reported a net profit of Rs 14.82 crore.