PNS|Vijayawada
AP CID chief N Sanjay has said that irregularities in the Margadarsi Chit Fund are the biggest ever financial fraud in chit fund companies.
Speaking to media persons in Hyderabad on Tuesday, the CID chief said that the Margadarsi chit fund group had diverted its subscriber’s funds to their associate companies and to other unknown investments intentionally for personal gains. He said that the company is forcing the subscribers to retain their money continuously with the company by offering interest and security by accepting deposits.
CID chief Sanjay also said that Margadarsi has been involved in money laundering by accepting cash subscriptions in high amounts in violation of various prevailing laws under the Chit Fund Act 1982. It has been established prima facie that the Margadarsi group is committing these violations by fraudulent accounting practices such as inflating cash balances in the name of cheques on hand and cash on hand at the branch level, not filing the mandatory balance sheets and accounts as per the Chit fund Act either at the branch level or with the Registrar of Chits at State level.
The company also did not submit the necessary documents to the regulators who are duty-bound to find out the genuineness of the bloated figures reported upon, he added.
In a release by the officials of Stamps and Registrations department, they stated they have conducted inspections in various chit fund units of Margadarsi and noticed large-scale violations, financial mischief, and procedural irregularities. An amount of Rs 459.98 crore which is the deposits of subscribers has been diverted and invested in Mutual Funds, Government Securities, and equity instruments, both quoted and unquoted including subsidiaries and their associates.
CID registered seven FIRs upon the complaint from the Commissioner & IG of Stamps and Registrations. In all these FIRs, Ramoji Rao, chairman of the company is the prime accused followed by Sailaja Kiran, Managing Director, concerned branch managers, and the principal auditor K Sravan. All the accused were questioned by the CID.
Sanjay maintained that instead of cooperating with the CID in the investigation process the accused had indulged in defaming and blaming the department in various ways. He said, “As these violations pertain to the domain of central enforcement agencies, we have met concerned agencies in Delhi and Hyderabad and requested them to take timely action against the company.”
