T Venkatram Reddy, the chairman of Deccan Chronicle and The Asian Age group of publications, was arrested on Saturday afternoon after being interrogated by the Central Bureau of Investigation or CBI in connection with a bank cheating and fraud case filed in July 2013.
His brother T Vinayak Ravi Reddy, who is vice-chairman and managing editor of Deccan Chronicle Holdings Ltd, was also arrested over charges in the same case.
The case is related to the alleged fraud of Rs 357 crore suffered by Canara Bank; it was registered under Sections 120-B r/w 420, 468 and 471 of the Indian Penal Code.
The CBI had filed a criminal case against the three key promoters of the Deccan Chronicle media group (DC) - T Venkatram Reddy (chairman), T Vinayak Ravi Reddy (managing director) and PK Iyer (vice-chairman) - for allegedly defrauding Canara Bank.
After the arrests, both Mr Reddy and his brother were taken to Hyderabad's Osmania General Hospital for a medical check-up.
Sources in the CBI had earlier alleged that the agency has found evidence that the DC promoters had "deliberately hatched a conspiracy to cheat and cause a loss to a tune of Rs 1,230 crore to the Canara Bank over a period of four years, from 2008 to 2012".
"It is alleged that the company had submitted false and fabricated balance sheets concealing its actual borrowings from Canara Bank's corporate lending branch, Secunderabad, and other banks and had also alienated the security hypothecated/mortgaged to Canara Bank. The total loss allegedly caused to Canara Bank is to the extent of Rs 357.77 crore (approx) as on 08.09.2012," an earlier CBI release from Delhi had said.
"In furtherance of the conspiracy, the accused had availed Open Cash Credit limit with periodical enhancements and multiple Short Term Corporate loans aggregating Rs 1,230 crore (approximately) from Canara Bank, thereby availing excessive bank finance without adequate drawing power by allegedly submitting false and fabricated financial statements and by suppressing the borrowings taken from other banks," it said.