The CID had also raided the chit fund company's corporate office in Hyderabad for three days last December, where it unearthed collections from branch offices being funnelled into the corporate office for onward investment into mutual funds which are contingent to risks in the capital markets
The Andhra Pradesh Police CID has registered multiple FIRs against Margadarsi Chit Fund Pvt Ltd for a string of alleged irregularities, including diversion of depositors money into mutual funds and speculative markets for personal gain, an official said on Saturday.
Naming the chit fund's chairman and media baron Cherukuri Ramoji Rao, company director Sailaja Cherukuri and the firm's branch managers from various locations as accused, the CID termed the irregularities grave in nature. Multiple CID teams swooped on Margadarsi branches in Visakhapatnam, Rajamundry, Eluru, Vijayawada, Guntur, Narasaraopeta and Anantapur, where searches are continuing.
"In view of the findings which are grave in nature, including the diverting of the subscribers money to mutual funds/speculative markets for their personal gains... the CID had immediately registered the cases and in pursuance of the FIRs, they commenced the investigation of the case," an official said.
Non-payment of monthly subscriptions, illegal diversion of funds to the corporate office, non-disclosure of revenue and expenditure account and several other irregularities were named by the CID. FIRs were registered on Friday under various sections of the Indian Penal Code, Section 5 of Andhra Pradesh Protection of Depositors in Financial Establishments Act and Sections 76 and 79 of the Chit Funds Act.
As the regulating power of chit fund businesses, the Stamps and Registration Department started its search of Margadarsi branches in October and November, 2022 along with other such firms. The CID had also raided the chit fund company's corporate office in Hyderabad for three days last December, where it unearthed collections from branch offices being funnelled into the corporate office for onward investment into mutual funds which are contingent to risks in the capital markets.
Rao is an influential media baron with interests in multiple businesses, including owning the famous Ramoji Film City in the outskirts of Hyderabad metropolis.