Margadarsi should transparently share records: Andhra CID

Margadarsi Chit Funds Pvt Ltd (MCFPL) must transparently share the required records for fair and proper investigation, Andhra Pradesh CID chief N Sanjay has said, citing a couple of Supreme Court guidelines.

He made these remarks in light of the registration of multiple FIRs against Margadarsi for alleged irregularities, including diversion of depositors' money into mutual funds and speculative markets for personal gain. Some employees of the company have been arrested.

"MCFPL being a chit company has to transparently share its records, required to be maintained under the Chit Funds Act, with investigating officers for a fair and proper investigation," Sanjay said in a press note shared on Thursday night.

Justifying the probe against Margadarsi, the additional director general of police cited the Supreme Court's observations in M/S Shriram Chits & Investment vs Union of India and Others, 1993: " The Act is intended to regulate and to bring in financial discipline in the chit business, as the foremen deal in and dabble with the funds of the subscribing public."

He also invoked the Supreme Court guidelines in K K Bhaskaran vs State of Tamil Nadu (2011) 3 SCC 793 which held that "The state being the custodian of the welfare of the citizens as parens patriae, cannot be a silent spectator without finding a solution for this malady'.

The senior IPS officer said the CID had been probing Margadarsi only after competent authorities reported on its alleged crimes, with the the registrars being the statutory authority to regulate chit fund activity under the Chit Funds Act, 1982 and also invoke provisions of law upon noticing violations.