Andhra CID Asks ED, I-T Dept To Probe Margadarsi Chit Fund

The ADG said they have written to the Enforcement Directorate (ED), the Income-Tax Department and the serious fraud investigation office (SFIO) to probe these charges.

The Andhra Pradesh CID has asked central agencies like the ED and the Income-tax department to probe the Margadarsi chit fund company, floated by media baron Ramoji Rao, for alleged violations of the chit fund law after it found that cash deposit records of the firm were "bloated and incorrect", a senior state police officer said Wednesday.

Additional Director General (ADG) of Police (CID) N Sanjay told reporters here that Margadarsi Chit Fund Private Limited (MCFPL) allegedly raised deposits "without permission of the RBI" and the company owned by Rao, chairman of Telugu news group 'Eenadu', "diverted" the amount collected from the depositors to the "risky stock market".

However, the company officials denied it was involved in any wrongdoing and claimed that action is being taken against them as the state government thinks its media coverage is "biased".

The ADG said the CID suspects that the people depositing the funds with the chit fund company could be "common people or fictitious". He said while there are no complainants in the case, the state government cannot be a "silent spectator" to these alleged violations.

The Criminal Investigation Department (CID) chief alleged that the chit fund company was not filing its balance sheets under the Chit Fund Act of 1982 but under the Companies Act and the state CID considered this an irregularity as public funds were being handled by private entities.

The ADG said they have written to the Enforcement Directorate (ED), the Income-Tax Department and the serious fraud investigation office (SFIO) to probe these charges.

The CID has filed seven FIRs against the company, and has named five people, including Ramoji Rao and his daughter-in-law Sailaja Kiran, as accused in the case. All the five have also been questioned, the CID ADG said.The AP CID said it registered a criminal case against the company, its promoters and its managers on the complaint of the Commissioner and IG of Stamps and Registrations of the state which found "glaring violations" in the affairs of the Margadarsi group.

A total of 17 chit fund companies in the state are under the CID scanner, Sanjay said.

The amount collected by the chit fund company was "simply diverted to the risk of the stock market. We have written and also met the officials of the ED, Income-tax department and the SFIO to inform them about this case so that they can also take up an investigation under their respective laws," the CID ADG said.

(This report has been published as part of the auto-generated syndicate wire feed. No editing has been done in the headline or the body by ABP Live.)