VIJAYAWADA: The Stamps and Registration Department, which investigated the alleged irregularities in Margadarsi chits, said orders have been passed to wind up 23 chit groups of Margadarsi as several lapses were observed. The department, which is the authority to regulate the chit-fund business, had earlier conducted inspections in various chit-fund units of Margadarsi Chit Fund Private Limited (MCFPL). “Large scale violations, financial mischief and procedural irregularities were noticed in the inspections,’’ the department said in a statement on Tuesday.
The department said in view of the serious lapses, the accounts of MCFPL were audited by a qualified auditor and it was found that an amount of Rs 459.98 crore was invested in mutual funds, government securities and equity instruments, both quoted and unquoted, including subsidiaries and associates. “The MCFPL management has been diverting the subscribers’ money for its personal gain and indulging in commission of offences under various provisions of law and placing the hard earned monies of the gullible subscribers under risk,’’ the department stated.
The Stamps and Registration Department said during the audit conducted, certain grave irregularities were found, including non-payment of subscription for the tickets held by the foremen and for the vacant tickets recorded in the name of MCFPL, huge difference in subscription collected in comparison to prize money paid, which resulted in delay in payment of prize monies and utilisation of other groups’ subscription amounts and acceptance of deposits under the guise of Receipts to cover the obstacles due to short collection of subscriptions.
It was further observed that MCFPL compromised the auction proceedings by allowing defaulted subscribers to participate in auction by violating the terms and conditions of the chit agreements entered between the company and the subscribers and resorted to collection of subscriptions without conducting auction (other than first instalment).As MCFPL through its branch managers was acting prejudicial against the interest of the subscribers, the Deputy Registrars of Chits of districts passed orders winding up of 23 chit groups of MCFPL,’’ the statement said.