VIJAYAWADA: Former MP Undavalli Arun Kumar, who is waging legal battle for over a decade against the alleged irregularities by Margadarsi Finances, reiterated that Margadarsi Chit Fund Private Limited (MCFPL) owned by Ch Ramoji Rao resorted to irregularities by investing the deposits collected from the subscribers of chit funds into mutual funds and other subsidiaries.
Speaking to reporters in Rajamahendravaram on Tuesday, Undavalli said the amount secured through chits has to be deposited with the bank under Section 4 (2) of AP Chit Fund Act. “However, the same was not done in the case of Margadarsi Chit Fund. The amount was diverted to other investments, which is nothing but gambling,” he said.
Undavalli said he would share information provided to him by the Registrar of Companies (ROC) regarding chit funds and the violation by Margadarsi with the CID.He added as per ROC report, MCFPL offices in Dilshuknagar and Vanastalipuram (both in Hyderabad) were inspected based on complaints and it was found that the deposits secured from the chit fund subscribers were diverted for other purposes, which is illegal.
He said as per the report from ROC, based on complaints, Margadarsi Chit Funds Private Limited offices in Dilshuknagar and Vanastalipuram (both in Hyderabad) were inspected and it was found that the deposits secured from the chit fund subscribers were diverted for other purposes, which is illegal.“But at the end, it was mentioned that it was done with mutual consent. However, where is the question of consent before law? If it is illegal, then it is illegal. It is clear that MCFPL has violated the Act,” he asserted.
The former MP said that Vatti Vasant Kumar in 2008 had filed a complaint with Registrar of Companies and later he had impleaded in the case related to the complaint. He added that by the time he filed a case against Margadarsi Finances, the organisation was running in loss to the tune of Rs 1,360 crore.
“Yesterday, Ramoji Rao and MCFPL MD Sailaja Kiran, the accused number 1 and 2 in the cases registered by APCID, filed a petition in the Telangana High Court, in which they said that chairman and MD have no role to play in the transactions that took place in the respective branches. Now, the foremen, who look after the branches but do not even have cheque power, have become scapegoats,” he said.
Undavalli said after he filed a petition against Margadari Finances, one Rajaji on behalf of MCFPL has filed a defamation suit claiming that Ramoji Rao has no connection with the company. “However, the same person in the affidavit filed in the Court stated that Ramoji Rao was chairman of Margadarsi Chit Funds Private Limited. Further, it was mentioned that MCFPL is related to 24 other companies besides business operated under Hindu Undivided Family (HUF). This in itself is clear violation of law. Under Sec 193 of IPC, person giving wrong statement is punishable with 7 years of imprisonment,” he pointed out.
Further, the former MP said that as per RBI Act 1934, HUF cannot engage in any collection of deposits, but Margadarsi Finances, against which he had filed a petition, resorted to it, which is a violation of the Act.