VIJAYAWADA: The State government on Thursday issued orders permitting the Andhra Pradesh Crime Investigation Department (AP-CID) to attach movable properties worth Rs 242 crore belonging to the Margadarsi Chit Fund Private Limited (MCFPL) in connection with the probe in the alleged irregularities in the firm’s operations by its promoters.
The State government issued GO 116 on Thursday, authorising the attachment of the financial assets identified by the CID during the course of the investigation. The probe agency was already given permission to attach the company’s properties worth more than Rs 793 crore on May 29. Earlier, the CID sleuths had also questioned the chit fund’s chairman Cherukuri Ramoji Rao and managing director Sailaja Kiron in connection with the alleged scam.
The latest order, issued by Principal Secretary (Home) Harish Kumar Gupta, said Margadarsi has been operating chit groups, each of whose quantum ranges between Rs 50,000 and Rs 1 lakh, in Andhra Pradesh and Telangana.
The government said the CID sleuths as well as officials of the Stamps and Registration department, during searches at the MCFPL’s offices in Andhra Pradesh and Telangana, had found a number of irregularities and violations of provisions under the Chit Funds Act, 1982. The auditors had found that the chit fund collections from the branches were being transferred to the corporate office and the same was being invested in mutual funds.
“It was also learnt that the company had engaged in criminal activities by creating an ingenious vicious cycle of perpetrating fraud, cheating, criminal breach of trust and wrongful enrichment for its own gains at the cost of gullible chit subscribers,” the government had said.
After the probe agency found certain movable properties in the name of MCFPL, the CID requested the government to issue ad interim orders for attaching the said properties under Sections 3 and 8 of the AP Protection of Depositors of Financial Establishments Act, 1999.
Considering the CID’s request, the home department issued the ad interim orders for attachment of the movable properties for possession and control over them. The CID will file an application before the court to make the orders absolute.
“The attached financial assets include various components, such as bank accounts, investments, and other forms of movable properties, which have been found to be connected to the ongoing investigation in seven cases registered against the Margadarsi Chit Funds,” CID chief N Sanjay said in a statement.