Deccan Chronicle employees say their transfer orders are ‘illegal’, move tribunal

Several employees of the Deccan Chronicle Holdings Limited have approached a Hyderabad quasi-judicial body, contending that the company’s decision to close news bureaus and transfer the staff is illegal. DCHL, headquartered in Hyderabad, runs the English dailies Deccan Chronicle, Asian Age and Financial Chronicle, and the Telugu daily Andhra Bhoomi.

The case has been filed with the National Company Law Tribunal on the grounds that the Srei Multiple Asset Investments Trust’s Vision India Fund, which is set to take over DCHL, hasn’t assumed charge yet. Therefore, the employees contend, changes in the company structure are illegal.

The last few years have been difficult for DCHL. In 2015, its chairman, T Venkattram Reddy, and his brother and the company’s managing director, T Vinayaka Ravi Reddy, were arrested for using forged documents to secure loans worth Rs 10,000 crore.

In 2017, the company was declared insolvent for failing to pay its creditors and bids were invited for its takeover. In 2019, Srei, based out of Kolkata, won the bid.

Over the last two months, DCHL has shut its bureaus in Kolkata, Kochi, Mumbai, and Bengaluru, and transferred some of the staffers to the company’s offices in Hyderabad and Chennai. In February 2019, when insolvency proceedings were still underway, the Financial Chronicle was discontinued as a daily. However, its staff was retained, and Deccan Chronicle and the Asian Age began publishing business news on two pages under the Financial Chronicle masthead.

Legal nitty-gritty

On June 3, 2019, the National Company Law Tribunal, which adjudicates matters pertaining to corporate bodies, approved Srei’s takeover plan of DCHL. The new management usually takes over a company immediately, but Srei hasn’t done so yet.

In its order on December 5, 2019, the National Company Law Appellate Tribunal — which hears appeals against the orders of the NCLT — said that since Srei had not taken over DCHL, the company remained a “going concern”.

Ritwik Mukherjee, former senior assistant editor with the Financial Chronicle, Kolkata, told Newslaundry that when a company is a “going concern”, it’s not allowed to make any change to its structure. So, he claimed, DCHL’s shutting of bureaus and editions is “in contempt of the court”.

This was corroborated by Pavan Kumar Duggal, a lawyer in the Supreme Court. “If the NCLAT says the company is a going concern, you cannot alienate it,” Duggal said. “If the transfers have the effect that it nullifies the order of NCLAT, it’s not acceptable under the law.”

Allegations against management

Ritesh Mahajan, the lawyer representing DHCL’s employees at the NCLT, said the company issued the transfer letters on December 18 — two days before the NCLT closed for vacation until December 31. The transferred employees were asked to join their new offices on January 1.

Mahajan said the company chose to send the transfer orders on December 18 to block the possibility of the employees approaching the NCLT. He also pointed out that their transfer orders stated that the employees would attract “disciplinary action” if they didn’t join their new offices on January 1.

The employees wrote to VV Srinivasa Sesha Sai, general manager in charge of accounts, administration and human resources, who signed the transfer orders. The employees asked him to reconsider the decision. Their pleas were turned down.

Mahajan asked how transfer orders could be issued when the company has no management. He said this move is a ploy to make the employees resign.

The employees filed a formal complaint with the NCLT that raises five points: the misuse of authority by the company’s human resources department in asking them to join new offices; non-payment of dues and false assurances regarding job security; failure of Srei to take possession of DCHL; impropriety by the temporary management in taking such drastic measures; and failure of NCLT-appointed officials in ensuring a timely resolution of the company's woes.

Mahajan put the blame on Mamta Binani, the resolution professional appointed by the NCLT. Binani is president of the Institute of Company Secretaries of India and, as the resolution professional handling DCHL’s insolvency process, is responsible for the company’s fate. On her recommendation, the company could have been either liquidated or sold off to any interested party, Mahajan said.

Binani had invited bids for the sale of DCHL. When Srei showed interest, she saw to it that the committee of creditors approved the prospective buyer’s revival plan.

A senior official involved in the matter told Newslaundry, on the condition of anonymity, that Srei hasn’t been able to assume charge of DCHL because one of DHCL’s creditors, IDBI Bank, has appealed to the NCLAT, requesting that it be given the reins of the troubled media group. Srei is ready to take charge immediately, the official said, if the NCLAT rules in its favour.

The hearing was scheduled for January 6 but the date has now been changed to January 28. On January 6, the NCLT said, “The concerned authority is directed not to initiate any disciplinary action for non-compliance of the transfer order till the next date of hearing, which is directed to be kept in abeyance.”

Double whammy for employees

The transfer orders have aggravated the troubles of the company’s employees, who say they have not received their salaries for six months.

Mukherjee said the company transferred him to Mumbai when it shut its Kolkata bureau. Within seven days, the Mumbai edition was also closed and he was asked to join the office in Rajahmundry in Andhra Pradesh.

Mahajan said the transfer letters came at a time when it had become almost impossible for the employees to even commute to the office because they didn’t have money. He emphasised that owing to the non-payment of salaries, several employees have had to borrow money to make ends meet. Relocating to another city with the entire family would put a tremendous financial burden on them, he pointed out.

Rudrendu Purohit, who worked with the advertising department of the Asian Age in Kolkata, told Newslaundry that he had contacted DHCL’s management, asking them to release his pending salary since he needed money for his mother’s treatment. The management didn’t respond, he said, forcing him to pawn his sister’s jewellery to pay the hospital bill.

Some of the employees told Newslaundry that even though they weren’t receiving salaries, the management duly deducted Provident Fund contributions from their pay till June 2019. However, their PF accounts haven’t been credited for about 32 months, they said, and their gratuity dues are pending too.

DCHL’s employees in Kolkata are upset for another reason. In December, Binani visited their office and assured them that Srei would take over in January 2019. She said there would be no pay cuts, retrenchments or transfers. She told the employees their salaries would be regularised from January, and all dues would be cleared by March 2019.

The employees told Newslaundry that Binani also said these commitments would not be reversed, and they could tell their families that the worst was over.

The senior official involved in the company’s transition said salaries have been delayed as DCHL itself hasn’t received payments for government advertisements. The official underlined that while several bureaus had to be shut owing to a fund crunch, the company hasn’t fired any employee.

Kapil Kajal is a staff reporter with 101Reporters.com, a pan-India network of grassroots reporters.