According to sources, IDFC has filed a petition in the Madras High Court to quash an FIR filed by Photon Infotech in the Deccan Chronicle case

Infrastructure Development Finance Company (IDFC) has reportedly filed a petition before the Madras High Court to quash a first information Report (FIR) filed by Chennai-based Photon Infotech Pvt Ltd against the company, its senior executives and Deccan Chronicle Holdings (DCHL).

While IDFC has not confirmed the development, according to sources, there is a hearing scheduled on 11th March on the petition before the high court.

Earlier in an email reply, a spokesperson from IDFC had said, “We are taking all the legal recourse that we should in order to protect our interest. There is no merit in the case filed by Photon.”

In December last year, Photon Infotech filed an FIR against IDFC, its managing director (MD) and vice-chairman Rajiv B Lall, Vikram Limaye, deputy MD and Pravin Devcheli, deputy head of fixed income and treasury. Photon also named DCHL, its chairman and director T Venkatraman Reddy and PK Iyer, director in its FIR for indulging in a criminal conspiracy to cheat genuine investors through issuance of commercial papers (CP) in the trade market despite knowing the precarious financial conditions of DCHL.

Separately, both IDFC and Photon have initiated legal proceedings against DCHL and its promoters in the Andhra Pradesh High Court and before the Debt Recovery Tribunal (DRT).

Photon in its FIR has alleged that on 1 June 2012 it was sold a CP worth Rs5 crore by an agent through IDFC and DCHL. It also alleged that ratings agency CARE was also duped by both DCHL and IDFC by portraying “sound financial condition” of DCHL through “fabricated and inflated” reports. At that time, CARE has assigned a credit rating of A1+ to DCHL.

IDFC also bought non-commercial debentures and CPs worth Rs300 crore issued by DCHL. “However, when IDFC came to know about the bankruptcy of DCHL, it obtained additional security from the company. Before the maturity of its CPs, DCHL executed deed of guarantee and hypothecation of all assets in favour of IDFC,” Photon alleged in the FIR.

“IDFC and its senior executives fraudulently created a fabricated financial assistance of Rs25 crore of indeterminate date and attached security comprising of all assets of DCHL, including its contract with the Board of Control of Cricket In India (BCCI) for the Indian Premier League (IPL) franchisee Deccan Chargers, pledge of an indeterminate number of shares of DCHL held by T Venkatraman Reddy and PK Iyer,” Photon said.

In other case, Mumbai-based IDBI Trusteeship Services also filed a petition in the AP High Court seeking liquidation of DCHL after the company failed to repay Rs100 to HDFC and HDFC Bank that bought the non-convertible debentures in the Hyderabad-based company.

Meanwhile according to media reports, the Hyderabad police are yet to complete the investigation into a criminal case filed against DCHL promoters by Karvy Stock Broking