In a fresh development, the Andhra Pradesh State government has permitted the Crime Investigation Department (CID) to attach movable properties of Margadarsi Chit Fund Private Limited (MCFPL) to the tune of more than ₹242.03 crore on Thursday. The CID has been investigating the allegations against the company.
The Hindu accessed the G.O. Ms. No. 116 dated June 15, 2023 issued by Harish Kumar Gupta, Principal Secretary of Home Department, instructing the AP CID to attach the money parked in various mutual funds. The State government recently allowed the CID to attach immovable properties of the same company to the tune of ₹793.5 crore through a G.O. Ms. No. 104 on May 29, 2023.
In the fresh G.O. No. 116, the State government maintained that, “During the investigation, the AP CID has noticed a host of offences and violations of provisions of the Chit Funds Act, 1982. The irregularities are there for each individual chit group. On analysing the statements, the auditor found that the chit fund collections from the branches are being transferred to the corporate office and the amounts in turn being invested in mutual funds. It was also identified that the accused company had engaged in criminal activities by creating an ingenious vicious cycle perpetrating fraud, cheating, criminal breach of trust and wrongful enrichment for its own gains at the cost of gullible chit subscribers for non-payment of subscription amount and violated to maintain bank accounts to mask the fraudulent activities, Illegal Deposits Scheme.”
Further, the company is not in a position to pay the amounts to the subscribers, when they demanded, the CID alleged.
The CID further maintained that, “The company diverted the money to other investments illegally, which violated the Reserve Bank of India’s regulations and the provisions of Section 12 of the Chit Fund Act, 1982 and it is also an offence under Section 5 of the Andhra Pradesh Protection of Depositors of Financial Establishments Act, 1999.”
Under Section 3 and 8 of the AP Protection of Depositors of Financial Establishments Act, the Additional Director General of Police, CID, is ordered to file an application before the concerned court to get possession and control over the attached movable properties of Margadarsi.
The State government maintained that the Margadarsi diverted and invested this entire ₹242.03 crore in 40 different mutual companies in the country.
