The Crime Investigation Department (CID) authorities of the Andhra Pradesh police began questioning media baron and Eenadu group chairman Ch Ramoji Rao and his daughter-in-law Sailaja Kiran on Monday in connection with the Margadarsi Chit Funds scam.
A large group of 200 policemen from the Andhra CID went to Sailaja's residence, who has been named as Accused No. 2 (A-2) in the alleged irregularities in the Margadarsi Chit Funds, of which she is the managing director.
At the same time, Ramoji Rao, who happens to be the chairman of Margadarsi Chit Funds, also reached Sailaja's house. He has been named as Accused No. 1 (A-1) in the case. Tight security arrangements have been made around her residence.
The CID authorities are questioning Ramoji Rao and Sailaja separately, and they may be questioned together again later in the evening.
In their notices served on them last Tuesday, the CID authorities gave four dates for questioning Ramoji Rao and Sailaja - March 29, March 31, April 3, or April 6. Apparently, they agreed to questioning on April 3.
The CID issued notices under Section 160 of the Criminal Procedure Code to examine them at their residence/office and provided four different dates. The probe agency has also summoned branch managers of various branches of the chit fund company.
The notices have been served for alleged cheating, diversion of deposits into mutual funds, which are contingent on capital markets’ risks and violation of the Chit Fund Business Act and Reserve Bank of India (RBI) guidelines.
Acting on complaints by the Assistant Registrars of Chits, CID recently registered multiple FIRs across Andhra Pradesh into alleged chit fund fraud.
The complaints came after raids by the Stamp and Registration department on the offices of Margadarsi at several places in Andhra Pradesh and Telangana during October and November last year.
It was allegedly found during the raids that the chit fund collections from the branches were being transferred to the corporate office, and the huge amounts were being invested in mutual funds.
A case was registered against Margadarsi under Sections 120(B), 409, 420, 477(A) read with 34 of IPC, section 5 of Andhra Pradesh Protection of Depositors, and section 76, 79 of Chit Funds Act 1982.
Multiple CID teams had conducted searches on Margadarsi branches in Visakhapatnam, Rajahmundry, Eluru, Vijayawada, Guntur, Narasaraopeta, and Anantapur.
The CID named non-payment of monthly subscriptions, illegal diversion of funds to the corporate office, non-disclosure of revenue and expenditure accounts, and other irregularities as reasons for the investigation.
