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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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