Accusing the company of operating ghost subscribers and keeping the money to itself, APCID Additional Director General of Police (ADGP) N Sanjay said 40 per cent of chit groups have no subscribers.
Bapatla district Superintendent of Police Vakul Jindal informed that prima facie evidence was collected against the accused, and the arrested was produced in court.
The court gave verbal instructions to the AP CID not to disclose the details of the case to the media and questioned the agency as to why it was holding a press meeting to disclose the case details.
APCID chief N Sanjay pointed out that MCFPL flouted The Chit Funds Act and other rules by adding default and ghost subscribers into active chits.
The teams from three departments reportedly examined customer records, old and closed chit agreements, electronic documents and other records pertaining to financial transactions.
The court said the pleas filed by subscribers challenging the closure of chit groups would be merged with the one filed by the Margadarsi Chit Fund Private Limited management.
With regard to the Prakasam district chit groups case, the AG said the order for closure was given before the public notice was issued.
A detailed counter was given by the firm to the seven allegations made against it in the public notice.
The complainant further alleged that the MCFPL branch committed irregularities by operating the chit with 30 members instead of 50.
The AP government had contended that even if it is held that a small part of the cause of action may arise in Telangana , the vast majority of cause of action arises in AP.
On its part, MCFPL assured its subscribers that they have not violated any provisions of the Income Tax Act or RBI guidelines.
The counsel for the petitioner further claimed that the Supreme Court had often condemned the practice of investigative officers disclosing facts discovered during investigations to the media.
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.
She has not given answers to some of our queries during the investigation and even tried to avoid questioning.
According to sources, the CID sought to know as to where the money collected from depositors was diverted.
The State wants writ petitions concerning irregularities alleged against Margadarsi Chit Funds transferred from Telangana to Andhra Pradesh High Court.
Counsel for Sailaja told the court that it was believed that the State Government had written to the Centre requesting an LOC against her clients