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Rs 350 crore fraud: Deccan Chronicle Vice Chairman arrested in Bhubaneswar

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By NewsGram Staff Writer

P K Iyer, vice-chairman of Deccan Chronicle Holdings Ltd (DCHL), was arrested from a hotel in Bhubaneswar early in the morning on Saturday by the Odisha police.

Odisha Police later handed over Iyer, who was on the run, to the Central Bureau of Investigation (CBI), a police officer said.

“The CBI was looking for Iyer in connection with an alleged fraud to the tune of Rs.357 crore from Canara Bank,” said Deputy Commissioner of Police Satyabrat Bhoi.

He said Iyer was staying in the hotel in the name of Chitra Athwani for about two months and was planning to flee in the next two-three days.

“The accused had availed multiple short-term corporate loans by submitting false financial statements in 2009-11,” the officer added.

Police sources said Iyer had stayed in Kolkata and Port Blair before coming to Bhubaneswar.

The CBI will take him on transit remand for interrogation.

The Canara Bank had lodged a complaint with the CBI against the company’s promoters in 2013 after the company defaulted on a loan amounting to over Rs.350 crore.

A fraud case was registered against Iyer in Hyderabad.

Earlier this year, the chairman of Deccan Chronicle, T. Venkattram Reddy, was arrested by the CBI in Hyderabad along with his brother and managing director T. Vinayak Ravi Reddy.

The DCHL, which publishes the English daily Deccan Chronicle, argued that the arrests were made in violation of Supreme Court orders.

The Canara Bank alleged that they availed loans and cash credit aggregating to Rs.1,230 crore by submitting false and fabricated financial statements and by suppressing the borrowings taken from other banks.

The bank claimed that the total loss caused to it was about Rs.357.77 crore.

(With inputs from IANS)

Next Story

Chinese Police Catches Hold of $1.5 Billion Money in Online Lending Scandal

The internet has helped financial platforms attract money from financial novices with little knowledge of the risks involved.

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China
Chinese policemen watch as depositors from Ezubao gather outside the State Bureau for Letters and Calls Reception Division office in Beijing, Jan. 1, 2016. China's policy ministry says it investigated 380 online lenders following an avalanche of scandals. VOA

Chinese police have investigated 380 online lenders and frozen $1.5 billion in assets following an avalanche of scandals in the huge but lightly regulated industry, the government announced Monday.

Beijing allowed a private finance industry to flourish in order to supply credit to entrepreneurs and households that aren’t served by the state-run banking system. But that threatens to become a liability for the ruling Communist Party after bankruptcies and fraud cases prompted protests and complaints of official indifference to small investors.

The police ministry said it launched the investigation because person-to-person, or P2P, lending was increasingly risky and rife with complaints about fraud, mismanagement and waste.

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The police ministry said it launched the investigation because person-to-person, or P2P, lending was increasingly risky and rife with complaints about fraud, mismanagement and waste. Pixabay

The ministry gave no details of arrests but said more than 100 executives were being sought by investigators and some had fled abroad. It said authorities seized or froze 10 billion yuan ($1.5 billion) but gave no indication how much might be returned to depositors.

Police say some lenders and investment vehicles were brazenly fraudulent, while others collapsed after inexperienced founders failed to manage risk.

Monday’s statement said P2P lenders were investigated for complaints including wasting money, reporting phony investment plans and using illegal tactics to raise money.

Lending through online platforms grew by triple digits annually until 2017 when regulators tightened controls.

Depositors lent 1.9 trillion yuan ($280 billion) last year, but that was down by 50 percent from 2017, according to the Shenzhen Qiancheng Internet Finance Research Institute.

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The internet has helped financial platforms attract money from financial novices with little knowledge of the risks involved. Pixabay

The outstanding loan balance stood at 1.2 trillion yuan ($177 billion) at the end of 2018, down 25 percent from a year earlier, according to Diyi Wangdai, a web site that reports on the industry.

P2P lenders are part of a privately run Chinese finance industry the national bank regulator estimated in 2015 had grown to $1.5 trillion.

The internet has helped financial platforms attract money from financial novices with little knowledge of the risks involved.

Many lend to factories and retailers or invest in restaurants, car washes and other businesses. But inexperience and poor risk control means a downturn in business conditions can bankrupt them.

Also Read: Sales of Smart Feature Phones Expected To Be About $28 Billion Over Next Three Years

Finance as a whole has come under tougher scrutiny after a 2015 plunge in stock prices led to accusations of insider trading and other offenses.

In one of China’s biggest financial scams, authorities say depositors lost 50 billion yuan ($7.7 billion) in online lender Ezubo before it was seized by regulators in 2015.

The founder and his brother were sentenced to life in prison in 2017. (VOA)