HYDERABAD: The legal battle over Margadarsi Financiers took a new turn as two senior Supreme Court lawyers argued in the Telangana High Court that criminal proceedings against Ramoji Rao’s family members were invalid. They questioned whether Ramoji’s son, Kiran, could be held accountable for violations allegedly committed by his father.
Senior Supreme Court lawyer Mukul Rohatgi, representing Margadarsi, argued that since the company operated under a Hindu Undivided Family (HUF), only Karta Ramoji Rao was liable for financial irregularities. He emphasised that other family members had no connection to the alleged violations. The bench raised concerns about accountability beyond civil liabilities.
Senior lawyer Siddhartha Ludra, also representing Margadarsi, requested a postponement, citing personal reasons. The next hearing is scheduled for February 28.
Margadarsi Financiers, founded in 1972 by Ramoji Rao under HUF, allegedly collected Rs 2,610.38 crore from 2.75 lakh depositors between 1997 and 2006, despite a 1997 act prohibiting such collections. By March 2006, the company reported Rs 1,369.47 crore in growing losses, leaving nearly 50% of depositors unpaid.
After a complaint in 2006 by former MP Undavalli Arun Kumar, the RBI confirmed the illegal deposit collection but stated only the state government could act. The Andhra Pradesh government and Undavalli appealed the dismissal of the case in 2018, and the Supreme Court ordered a fresh examination in April 2024.