The Crime Investigation Department of Andhra Pradesh police on Saturday registered criminal cases against media baron and Eenadu group chairman Ch Ramoji Rao and his daughter-in-law Sailaja Kiran in connection with alleged irregularities in Margadarsi Chit Fund.
The CID registered FIRs under Sections 120(B), 409, 420, 477(A) read with 34 of the Indian Penal Code, Section 5 of the Andhra Pradesh Protection of Depositors in Financial Establishments Act, 1999, and Sections 76 and 79 of the Chit Funds Act, 1982.
The FIR named Ramoji Rao, chairman of Margadarsi Chit Funds, as the prime accused and Sailaja, who is the managing director, as accused No. 2 (A-2).
An official release from the state government said multiple teams of the CID launched searches in the premises of Margadarsi Chit Funds at Visakhapatnam, Rajamahendravaram, Eluru, Vijayawada, Guntur, Narasaropeta, and Ananthapuram branches.
“The foremen of these branches are being questioned about the alleged fraud, and statements are being recorded. All the records are being examined, and incriminating documents are being seized. The foremen of Narasaraopeta, Eluru, and Anthapuram branches are absconding," the official note said, adding that the search process is still ongoing.
The official note said the Stamps and Registration Department conducted inspections and searches on Margadarsi branches during October and November 2022, along with other chit fund companies.
During the search, the department faced non-cooperation from the foremen and other staff members, and several irregularities and violations of rules and regulations were unearthed.
Some of the irregularities included non-payment of monthly subscriptions/installments in respect of multiple tickets held in the name of Margadarsi, which were later substituted with new subscribers. Instead of depositing the future subscription amount into the 2nd account as per the provisions of Section 22, the company was transferring the said amount to the Corporate Office Account and, in turn, issuing a "receipt" carrying interest at the rate of 4%-5% in the name of the subscriber. Non-disclosure of revenue and expenditure accounts, statements of assets and liabilities, and details of investment as per Rule 28 read with Section 24 of the Chit Fund Act were also found.
A search was also conducted at the corporate office of Margadarsi in Hyderabad from 14.12.2022 to 16.12.2022. During the search, it was observed that the chit fund collections from the branches are being transferred to the Corporate Office, and the huge amounts, in turn, are being invested in mutual funds, which are contingent on capital markets’ risks, the official note said.
