9 OCT, 2012, 07.12AM IST, MAULIK VYAS & ANITA BHOIR,ET BUREAU
Lenders may lose Rs 4000 crore as Deccan Chargers loses franchise
MUMBAI: The Bombay High Court declined to stay the termination of Indian Premier League cricket franchise Deccan Chargers nearly bringing the curtains down on lenders' hopes to recover more than Rs 4,000 crore of loans.With the court ruling, banks which were hoping to recover at least about Rs 1,000 crore from Deccan Chronicle HoldingsBSE -4.73 % through the sale of the cricket franchise, would look to sell other assets to recover a part of their funds.
The drama of bankers attempting to recover their loans and the founders looking to salvage their business by attempting to sell the franchise somehow may be nearing an end with little assets left now barring the physical ones. The company also has the Deccan Chronicle and Financial Chronicle publications.Although the dispute between the Board of Control For Cricket in India (BCCI) and Deccan Chronicle was in arbitration over the cricket franchise, Justice RD Dhanuka ruled, "an arbitrator can not overrule an order passed by the court."
Banks such as Axis BankBSE 4.57 %, ICICI BankBSE 1.46 %, Canara BankBSE 2.96 %, Corporation BankBSE 0.71 % and Yes BankBSE 0.99 % stare at the spectre of losing a substantial part of their lending with no clarity about the assets Deccan Chronicle owns.When the dispute was in full swing Deccan Chronicle attempted to sell the cricket franchise to a Mumbai-based builder Kamla Landmarc."Our client (Kamla Landmarc) is ready and willing to perform the MoU entered into with Deccan Chronical provided they initiate necessary proceedings to get termination notice set aside," said Ajay Vazirani, senior partner, Hariani & Co, a law firm that represents Kamla Landmarc. Deccan Chronicle fell into bad times after expansion and diversification into businesses such as books retailing did not yield the anticipated returns. Early October the court had directed Deccan Chargers to furnish the unconditional bank guarantee of Rs 100 crore to BCCI. However, Hyderabad-based media group faild to produce the same.
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