Margadarsi Scam: Chit Fund Rules Were Violated

New Delhi: The Andhra Pradesh CID has asked central probe agencies like the Enforcement Directorate and the Income tax department to probe the Margadarsi Chit Fund scam for alleged violations of the chit fund act-1982 after it found deposits were diverted pointing out to money laundering.

Addressing the media Additional Director General (ADG) of Police (CID) N Sanjay said that the group raised deposits without permission of the RBI and the company floated by Ch Ramoji Rao allegedly diverted the amount collected from the depositors into the stock market.

The ADG stated that people depositing the funds with the chit fund company could be through common people or fictitious ones and even though there are no complainants in the case, the state government would not be a silent spectator to these alleged violations and let the whole thing sink. Quoting the Supreme Court ruling in the Sreeram Chit Funds case where it said that one should not wait for a complaint and the responsibility of protecting the public interest lies with the government. He alleged the chit fund company was not filing its balance sheets under the chit fund Act but under the Companies Act and the state CID considered this an irregularity as public funds were being handled by private entities.

The AP CID has filed seven FIRs against the group and arrested five people, including Ramoji Rao and his daughter-in-law Sailaja Kiran. The AP CID have questioned both of them at their residences in Hyderabad in the past week and it is reported that Ramoji Rao who is on bed rest had agreed that the funds were diverted. (With inputs from PTI and Sakshi) 

Also Read: Andhra CID summons Ramoji Rao, daughter-in-law in Margadarsi case