Vijayawada: Crime Investigation Department (CID) teams carried out simultaneous searches at the branches of Margadarsi Chit Funds Private Limited located in Visakhapatnam, Rajamahendravaram, Eluru, Vijayawada, Guntur, Narasaraopeta and Anantapur on Saturday.
Officials questioned the company’s foreman (supervisors) on details of alleged fraud, recorded statements, examined records and seized some documents which the CID said were incriminating. However, the CID found that staff working in the company’s branches at Narasaraopet, Eluru and Anantapur had absconded and searches are still continuing till last reports came in.
The searches comes a day after FIRs were registered on Friday under relevant sections and company’s chairman Cherukuri Ramoji Rao, managing director Cherukuri Sailaja, and branch managers of the company were named as accused.
The sections include: 120 (B), 409, 420, 477 (A) read with 34 of IPC; section 5 of Andhra Pradesh Protection of Depositors in Financial Establishments Act, 1999 and section 76,79 of Chit Funds Act, 1982.
In October and November, 2022, the Registration and Stamps Department of Andhra Pradesh had inspected branches of the company along with other chit fund companies and noticed serious lapses which incude non-payment of monthly subscriptions, instalments in respect of multiple tickets held in the name of the company which were later substituted with new subscribers; foremen, instead of depositing future subscription amounts into second account as per norms were found to be be transferring the amount to the corporate office account and issuing a receipt carrying interest at four to five per cent in the name of the subscriber; and non-disclosure of revenue and expenditure account and statement of assets and liabilities and details of investment as per norms.
The Registration and Stamps Department also noticed lapses in the financial statements submitted by the company. Accordingly, the prescribed chit-wise balance sheet and profit and loss statements were not being maintained and submitted; an amount of Rs 459.98 core was shown in Note No. 7 of the balance sheets as investments; in Note 40, the company disclosed a list of three subsidiaries — Margadarsi Chits Private Limited, Chennai, Margadarsi Chits (Karnataka) Private Limited, Bengaluru and Ushakiron Media Private Limited, Hyderabad. The department noticed that though the first two firms were engaged in chit fund business, Ushakiron held 88.5 per cent of the paid-up capital and was not engaged in chit fund business.
Based on these findings and diversion of subscribers’ money, assistant registrars of chits at Visakhapatnam, Kakinada, Eluru, Vijayawada, Guntur, Palnadu, Kurnool and Anantapur lodged complaints with the CID which in turn registered cases and took up investigation and the subsequent searches.
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