Margadarsi faces closure in 4 States?

According to sources, the offices of the MCFPL may be closed by September in Andhra Pradesh and later in other three States.
Image used for representational purpose  (Photo | PTI)
Image used for representational purpose (Photo | PTI)

HYDERABAD: Andhra Pradesh State Crime Investigation Department’s (CID) Additional Director General of Police N Sanjay has indicated that Margadarsi Chit Funds Private Limited (MCFPL), run by media baron and Eenadu group chairman Ch Ramoji Rao in four States would be closed if it continues to function the way it is doing now.

“This company (MCFPL) has admitted to committing and continuing violations. It has violated every law. This company, which is existing in four States, will be completely closed,” Sanjay said, speaking at a press conference here on Tuesday, after submitting a status report to his counterpart in Telangana with a request to initiate action.

According to sources, the offices of the MCFPL may be closed by September in Andhra Pradesh and later in the other three States. Addressing the press conference, the AP CID chief alleged that Ramoji Rao managed to evade the implementation of the Chit Funds Act, enacted by the Central government in 1982, using his influence for 26 years with the then government in the undivided Andhra Pradesh to defer the process of bringing in Andhra Pradesh Chit Funds Rules, 2008 for regulating chit fund firms.

Equating the alleged financial irregularities in the chit fund company to an unreported child sexual abuse, the AP CID chief said that in the same manner, sexual predators entice victims with chocolates, MCFPL lured their subscribers to deposit money even after maturity by offering interest, although there is no provision for such thing. Citing the provisions of the Chit Funds Act, 1982, Sanjay stated that any company involved in chits shouldn’t engage itself in other business activities.

Rejecting the argument of representatives of the MCFPL, Sanjay said that claiming to file reports under the Companies Act is foolish when they are doing chit-fund business. He also observed that the MCFPL is utilising the provisions of the Chit Funds Act to confiscate the properties pledged by customers for claiming chit amounts. Sanjay also said that winding up orders for 23 chit groups with a capital of `604 core will be issued in the next one or two days.

Revealing findings of the investigation as they analysed three years of data, the Additional DG rank IPS officer asked: “How can they do thousands of crores of business if they take only five per cent commission? Is it called a profit? The investigation found that there were unknown subscribers, unaccounted subscribers, defaulted subscribers, and removed subscribers who re-entered the records. It is a serious economic offence. We are not under pressure from the government.”

Accusing Margadarsi of using the newspaper to launch a smear campaign against investigating officials, he suggested that the company file a complaint on white paper to his higher authorities if they have anything against the investigation.

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The New Indian Express