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TRANSCRIPT
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ALEKYA(PGDM-IB)
ANUSHA(PGDM)
FLORANCE(PGDM)
GOUTHAM(PGDM)
KASHYAP(PGDM-IB)
TREND PRESENTATION
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The Deccan Chronicle saga turns murkier
www.dailynews.com THE WORLDS FAVOURITE NEWSPAPER - Since 1879
The 75-year-old newspaper, which identified itself withthe people not only in Hyderabad but also in three
regions, Andhra, Rayalaseema and Telangana, is for the
first time facing an acute crisis.
The promoters of the media company, named as Deccan
Chronicle Holdings Limited (DCHL) after it went public,
are facing criminal charges of forgery, fraud and
concealment after they had pledged 54 per cent of shares
to Future Capital. Karvy, a stock broking firm, filed a
complaint with the Hyderabad police against the
promoters, T Venkattram Reddy, T Vinayak Ravi Reddy
and P K Iyer, charging them with tricking the firm, when
they pledged the shares and raised funds.
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Will Deccan Chronicle
survive the acute financial
crisis and the criminal
cases staring in the face
of its promoters?
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ABOUT COMPANY
Deccan Chronicle is an Indian English
language daily newspaper. It is publishedin Hyderabad, India by Deccan Chronicle
Holdings Limited.
Supplements are "TV Guide", "Sunday
Chronicle", "Chennai Chronicle", and
"Bangalore Chronicle". It also supplies otherweekly features like "School Chronicle" and
"Teen Chronicle".
Since May 2004, it started printing
the International HeraldTribune in Hyderabad and sold for Rs 30
per copy
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Owners of the DC
The company started its operations in AP
as a partnership concern in 1938.
The late T Chandrasekhar Reddy took over
the operations in 1976 after the earlierpromoters declared bankruptcy.
Mr. Reddy subsequently handed over the
operations to his two sons T Venkattram
Reddy and T Vinayak Reddy, who havebeen managing its operations since late
1970s
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Decline
The charge against the promoters was
that the shares already held by theFuture Capital in the way of pledge
were said to have been partly released
by its depository. The DCHL raised Rs
170 core from Future Capital.
Then followed news that financial
institution IFCI Ltd had filed a petition
in the Andhra Pradesh high court to
wind up the operations of DeccanChronicle Holdings for failing to
redeem non-convertible debentures
(NCDs) worth about Rs. 25 crore.
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Early 2012: DCHL and Aviotech borrow Rs 170 crore (Rs 1.7
billion) from Future Capital. Lien created on 60.4 million shares
held by Karvy on promoters' behalf
May 28: Shares are worth roughly Rs 180 crore (Rs 1.8 billion) at
a price ofRs 30 each. However, Future wants additional pledge
of52 million shares
June 1: Promoters tell Karvy that agreement with Future Capital
has been terminated. They move part of 'freed' shares to Religare
enterprises, another depository
July 26: Future Capital tells exchanges that promoters have
pledged 54% of their shares
July 31: Karvy files police complaint against promoters
August 2: Stock dips to Rs 13. At this price shares pledged toFuture worth less than Rs 150 crore (Rs 1.5 billion)
THE LOAN THAT STARTED IT ALL:
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A newspaper that wanted to fly The financial woes for the DCHL piled up because of
promoters leapt into non-publications business like
cricket and the book trade, represented by the IndianPrimary League (IPL) team Deccan Chargers and the
Odyssey book houses.
Apart from these investments, their ventureslikeFinancial Chronicle and their acquisition
ofAsian Age, too, are understood to have been the
undoing of the promoters.
Another venture, an air cargo business in which the
promoters ofDeccan Chronicle were seeking to
invest, did not finally take off.
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A defining moment for the company came in 2008.
Riding on Indian Premier League (IPL) frenzy, Deccan
Chronicle Holdings bought the Deccan Chargers
franchisee for $107 million.
The franchise gave Deccan Chronicle a visible national
brand, but the teams first outing in the IPL was a
disaster; it finished last in the league.
After its sponsor Jaypee Group withdrew from
sponsorship, the team revamped its administration, going
on to win the second season of IPL.
It is understood that the IPL had eaten into not only
profits but also revenue being earned by Deccan
Chronicle
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Conclusion
The publisher of Deccan Chronicle is
in deep trouble after expanding into
other businesses and accumulating
debt. The current problem Deccan
chronicle is due to unrelated
diversification and the managements
loss of focus.
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