The Deccan Chronicle saga turns murkier
Will Deccan Chronicle survive the acute financial crisis and the criminal cases staring in the face of its promoters?
A SPECIAL CORRESPONDENT assesses the fate of the 75-year-old Hyderabad newspaper.
The 75-year-old newspaper, which identified itself with the 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 stockbroking 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. The promoters have been operating their depository account at Karvy.
The charge against the promoters was that the shares already held by the Future Capital in the way of pledge were said to have been partly released by its depository. But the depository, Karvy stockbroking firm, alleged that the release shares were manipulated by forgery. The DCHL raised Rs 170 crore from Future Capital.
Apart from this, the Times Of India (TOI), which has so far failed to compete with the Deccan Chronicle, scented blood and has been running stories running down the newspaper and its promoters. The TOI exposed that the promoters, particularly DCHL chairman T Venkattram Reddy, mortgaged more properties, besides DCHL properties, in several banks and raised Rs 1684 crore at the highest interest rate of 15 per cent. The Eenadu daily in Andhra Pradesh is also carrying several stories against DCHL as the feud between them still is raging.
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 Indian Primary League (IPL) team Deccan Chargers and the Odyssey book houses. It is understood that the IPL had eaten into not only profits but also revenue being earned by Deccan Chronicle. Apart from these investments, their ventures like Financial Chronicle and their acquisition of Asian Age, too, are understood to have been the undoing of the promoters. Another venture, an air cargo business in which the promoters of Deccan Chronicle were seeking to invest, did not finally take off.
In 2004 the paper announced a public issue and then entered Tamilnadu to take on the Hindu. At that time Business Line, the financial daily from the Hindu stable, predicted that the prospects for break-even for this venture were not good, and suggested than an investment “ may be avoided in the initial public offer (IPO) of Deccan Chronicle Holdings, as the pricing appears stiff.”
From its inception 75 years ago in Hyderabad, Deccan Chronicleremains the region’s largest circulation English daily. After it leapt into Coastal Andhra region and later into Rayalaseema and Telangana, it became the largest circulation English daily in Andhra Pradesh. Even before it went public, its profits zoomed and it cornered the majority share of advertisements from corporate companies.
The daily was launched by Iyers first and then it went into the hands of T Chandrasekhar Reddy, father of T Venkatram Reddy and T Vinayak Reddy following the bad blood arising between brothers. It was in a ramshackle state when it was acquired by Chandrasekhar Reddy in the1970s. He turned it around by encouraging the employees, particularly those on editorial board, by offering them lucrative salaries. Its circulation, however, remained stagnant for several years until P N V Nair joined it around 1986. Under his stewardship, the circulation of Deccan Chronicle climbed as never before and particularly its Sunday edition were sold like hot cakes because of articles by eminent writers and its Sunday Spice column.
After he was forced out and succeeded by the present editor A T Jayanti, the format of the daily has undergone change and a tabloid has been added to the main paper to cater to readers’ taste for gossip news. The main pages format, too, has been changed to carry more national and international news than state and regional news.
Its circulation went up thanks to reducing the price of the daily to Re 1 after the TOI hit the news stands in Andhra Pradesh. Rumours had it that the circulation was artificially pumped up. Whether it was true or not, recent reports have it that Deccan Chronicle management had reduced the circulation between 1 lakh and 1.5 lakh in all edition put together during the last two months.
Though its nearest competitors in the English newspaper business in Andhra Pradesh are unlikely to shed any tears for the daily as crises engulf it, its recent colourful saga made it one of the more dare-devil media expansions in recent times.
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