Margadarsi invested Rs 459.98 crore in mutual funds: Audit probe

However, it failed to show proof of payment of Rs 54,85,998 towards its subscription to the chits being managed by it.
Image used for representational purposes
Image used for representational purposes

VIJAYAWADA: A qualified auditor, who audited the accounts of Margadarsi Chit Fund Private Limited (MCFPL) as part of the investigation into the alleged irregularities committed by the company, had revealed that Rs 459.98 crore was invested in mutual funds, government securities and equity instruments, both quoted and unquoted, including subsidiaries and associates.

As per a press release issued by Commissioner and Inspector General of Registration and Stamps Department on Tuesday, MCFPL was diverting the subscribers’ money for its personal gain and placing the hard earned money of the subscribers under risk.

After inspecting various branches of MCFPL in Andhra Pradesh, the CID had already registered FIRs against MCFPL Chairman Ch Ramoji Rao, Managing Director Ch Sailaja Kiran and the concerned branch managers. Already four foremen were arrested and three of them were remanded in judicial custody.

“MCFPL is occupying vacant chits in addition to foreman chits. For the mandatory chit ticket to be in the name of the foreman as well as for the extra tickets occupied by the company in a chit group, the foreman is not contributing anything to the kitty of the chit,” the release said.  

“However, every month, MCFPL claims 5% of the chit amount as its foreman’s commission without paying the subscription amount. On evaluating five chit groups in Guntur district, it was observed that the foreman had so far claimed Rs 1,18,35,000 as commission and Rs 1,73,00,000 as the gross chit amount, which could be claimed by the foreman in the second month of the chit,” it said.

When it came to payment as subscription of the foreman ticket and vacant tickets held by him, MCFPL failed to show proof of payment of Rs 6,98,71,445 towards its subscription to the chits being managed by it and where it was responsible to pay on par with other chit group subscribers for the foreman’s ticket and other tickets in a chit group held by the foreman, it stated.

On evaluating 12 chits in Vizianagaram, it was observed that the foreman had so far claimed Rs 60,50,000 as commission and Rs 1,05,50,000 as the gross chit amount. However, it failed to show proof of payment of Rs 54,85,998 towards its subscription to the chits being managed by it. “The failure to pay its obligatory chit subscription, but fully availing the full chit amount and foreman’s commission in the chit groups, gives huge wrongful gains to MCFPL,” it added.

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