The latest order and the attachment of assets worth ₹793 crore recently takes the total attached properties to ₹1,035 crore within a month.
Following the registration of the FIRs, multiple teams of the CID launched searches on the premises of various MCPL branches. (Creative Commons)
Further hardening its stand against media baron Ramoji Rao’s Margadarsi Chit Fund Pvt Ltd (MCFPL) , the Andhra Pradesh government on Thursday, 15 June, issued orders attaching movable properties of the company which are valued at ₹242 crore.
The Crime Investigation Department (CID) of the Andhra Pradesh police, which has been probing the alleged financial irregularities of the fund, said the attached properties included equity shares and mutual funds held in companies such as Airtel, GAIL, HDFC, Union Bank of India, ITC, and others.
In a press release, CID Additional Director General of Police (ADGP) N Sanjay said: “The government of Andhra Pradesh has taken further action in its investigation into the financial irregularities surrounding Margadarsi, authorising the attachment of a second list of financial assets worth ₹242 crore as identified by AP CID.”
The latest order follows the recent attachment of assets worth ₹793 crore, which takes MCFPL’s total attached properties to ₹1,035 crore within a month.
Sanjay said that the assets attached are found to be linked to the ongoing investigation against the chit fund company, in seven cases.
In April this year, the CID sought the help of central investigative agencies such as the Enforcement Directorate (ED) and the Income Tax (I-T) Department to probe the financial affairs of MCFPL for alleged violations of the law, after it found that the cash deposit records of the group were “bloated”.
N Sanjay, at a media conference then, said that the group raised deposits “without permission of the RBI”, adding that the company, floated by media baron Ramoji Rao, allegedly “diverted” the amount collected from the depositors to speculate in the “risky stock market”.
He admitted that before the allegations of irregularities raised by the CBI, there were no complainants regarding the affairs of the company, adding that the Andhra Pradesh government ordered an inquiry as it could not remain a “silent spectator” to these alleged violations.
The main accusation against the company is that it had not been filing its balance sheets under the Chit Fund Act but was doing so under the Companies Act. As this is an irregularity, the CID was probing its affairs, as public funds cannot be handled by private entities.
ADGP Sanjay said the police had written to and met the officials of 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 so far.
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 (SP) Amit Bardar questioned MCFPL 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.
The CID had served notices to Ramoji Rao and Sailaja Kiran, who is his daughter-in-law, 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.
In March, the CID registered multiple FIRs across the state in the alleged chit-fund fraud committed by the Ramoji Group-owned MCFPL and launched an investigation.
The CID, in the FIRs, named media baron and MCFPL Chairman Cherukuri Ramoji Rao, his daughter-in-law and MCFPL 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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