The AP CID had registered multiple FIRs against the MCFPL for committing financial fraud with its chairman and his daughter-in-law as the accused.
An office of the Margadarsi Chit Fund. (Creative Commons)
Andhra Pradesh Crime Investigation Department (CID) chief N Sanjay on Sunday, 20 August, said that the beleaguered Margadarsi Chit Funds Pvt Ltd (MCFPL) was on the verge of a financial crisis.
He said it would be no surprise if it went the Agri Gold way. He was referring to the Agri Gold scam, in which a company set up in 1997 allegedly duped 32 lakh people from Andhra Pradesh, Telangana, Karnataka, and Tamil Nadu of hundreds of crores — if not thousands of crores — of rupees.
It may be worth mentioning that the CID had registered multiple FIRs accusing the MCFPL, accusing it of committing financial fraud.
Media baron and MCFPL chairman Cherukuri Ramoji Rao and his daughter-in-law Sailaja Kiran were named as accused number one and two, respectively, in the FIRs.
“It’s shocking to note that the current financial situation of the MCFPL is very grim. It is banking upon the fresh and recent subscriptions made by subscribers to make the payments to the other subscribers,” said Sanjay.
“There are around 50,000 subscribers who are yet to be paid by Margadarsi. As of date, there are more than a thousand prized subscribers across the state from 37 branches. These subscribers’ auction amounts have been delayed by more than one month,” claimed Sanjay.
“The management of Margadarshi is delaying the payments in the name of insufficient sureties. But, in reality, there are no funds with Margadarshi to make the payments to the subscribers,” he said.
This situation is the result of the unearthing of the MCFPL frauds by the CID, from November 2022, leading to eroded confidence among the subscribers and the public in general, and the resulting erosion of subscriptions, he added.
“The money which was already paid by the subscribers was misappropriated at various levels in several ways. It was often diverted to the main branch in Hyderabad and other financial organisations maintained by the MCFPL and the Eenadu management,” the CID chief said.
“Hence, a big question mark hangs over the future payments to be made by Margadarsi to its subscribers,” he added.
Given the situation, panicked subscribers are approaching police stations and MCFPL branches for assurances regarding their payments.
Sanjay also said that large numbers of subscribers were turning up with complaints of non-payment of chit money and undue harassment for sureties, which necessitated the registering of FIRs at various police stations, and that three FIRs were registered in this regard.
“In the light of these developments, the Andra Pradesh CID is taking into account the various complaints of subscribers and inquiring into them,” he added.
The CID also allotted a WhatsApp number — 9493174065 — where MCFPL subscribers from all around Andhra Pradesh could register and follow up on such complaints.
The officer claimed that Margadarsi was a haven for tax evasion, like a Swiss bank for the black-money holders of Andhra Pradesh and neighbouring states.
“Many a time black money was invested in Margadarsi in benami names with the knowledge of the management. This needs further probing by the Enforcement Directorate, the Income Tax Department, and other authorities,” he added.
“While the government focuses specifically on safeguarding the financial aspects of the subscribers it is also considering escalating the frauds of Margadarsi to the central investigation agencies,” said the CID chief.
“In a nutshell, Margadarsi has become like a black hole which sucks up all the subscribers’ money and there is no explanation for the money that was invested by the subscribers,” he added.
“No departmental action has been initiated by Margadarsi, even after several of its branch managers and staff have been arrested or involved in various criminal cases emanating out of fraud,” said Sanjay.
“At the same time, the top management is extending all its support to safeguard such errant branch managers,” he said.
“This reflects the connivance of top management with branch managers in misappropriating the hard-earned innocent subscriber’s money,” he claimed.
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