CID suspects those making deposits in the chit-fund company associated with Ramoji Rao could be 'common people or fictitious'.
Following the registration of the FIRs, multiple teams of the CID launched searches on the premises of various MCPL branches. (Creative Commons)
The Andhra Pradesh CID has asked central probe agencies like the Enforcement Directorate (ED) and the Income Tax (I-T) Department to probe the Margadarsi chit fund for alleged violations of the law after it found cash deposit records of the group were “bloated”, a senior police officer said on Wednesday, 12 April.
Additional Director General (ADG) of Police (CID) N Sanjay told reporters that the group raised deposits “without permission of the RBI”.
He added that the company floated by media baron Ch Ramoji Rao allegedly “diverted” the amount collected from the depositors to speculate in the “risky stock market”.
He also said the CID suspected that the people making deposits in the chit-fund company could be “common people or fictitious”.
He added that while there were no complainants in the case, the Andhra Pradesh government could not be a “silent spectator” to these alleged violations.
The ADG of CID said the chit fund company had not been filing its balance sheets under the Chit Fund Act but under the Companies Act, and the state CID considered this an irregularity as public funds were being handled by private entities.
ADG Sanjay said the police had written to and met with officials in the ED, I-T Department, and the Serious Fraud Investigation Office (SFIO) to probe these charges.
The CID has filed seven FIRs against the group and arrested five people.
The CID officials also arrested a chartered accountant, Kudaravalli Shravan, the official partner of Brahmayya & Co, who was the auditor for the Margadarsi Chit Fund.
A CID team led by Superintendent of Police Amit Bardar questioned Margadarsi Chit Fund Pvt Ltd Chairman Ramoji Rao on 3 April and the company’s Managing Director D Sailaja Kiran on 7 April.
Both were examined at their residence in Hyderabad.
Amit Bardar said the examination might continue and both Ramoji Rao and Sailaja Kiran might be asked to appear before them at the CID’s office in Andhra Pradesh.
Four teams, comprising around 20 officials, headed by Bardar, questioned Ramoji Rao for almost eight hours on 8 April.
The CID had served notices to Ramoji Rao and his daughter-in-law Sailaja, under CrPC Section 160.
CID sources said that Ramoji Rao did not cooperate with the probe and gave evasive answers to most of the questions.
It was last month that the CID registered multiple FIRs across the state in the alleged chit fund fraud committed by the Ramoji Group-owned Margadarsi Chit Fund Pvt Ltd (MCPL) and launched an investigation.
The CID, in the FIRs, named media baron and MCPL Chairman Cherukuri Ramoji Rao, his daughter-in-law and MCPL Managing Director Sailaja Cherukuri, and branch managers.
Acting on complaints by the assistant registrars of chits, FIRs were lodged in Visakhapatnam, Kakinada, Eluru, Vijayawada, Guntur, Palnadu, Kurnool, and Ananthapuramu.
The FIRs were registered under Sections 120(B), 409, 420, 477(A), read with Section 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.
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