Andhra CID asks ED, I-T dept to probe Margadarshi chit fund

The Andhra Pradesh CID has asked central probe agencies like the ED and the Income tax department to probe the Margadarshi chit fund for alleged violations of the chit fund law after it found cash deposit records of the group were "bloated", a senior police officer said Wednesday.

Additional Director General (ADG) of Police (CID) N Sanjay told reporters here that the group raised deposits "without permission of the RBI" and the company floated by media baron Ramoji Rao allegedly "diverted" the amount collected from the depositors to the "risky stock market".

He said the CID suspects that the people depositing the funds with the chit fund company could be "common people or fictitious". He said while there are no complainants in the case, the state government cannot be a "silent spectator" to these alleged violations.

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 ADG said they have written to and met the Enforcement Directorate, Income-tax department and the SFIO to probe these charges.

The CID has filed seven FIRs against the group and arrested five people, including Ramoji Rao and his daughter-in-law Sailaja Kiran. They are out on bail now.