In Eenadu vs Jagan flare-up, AP CID files 7 FIRs against group chit fund, attaches Rs 1000 cr property

“All the accused were questioned once. However, they are giving evasive answers and are not producing required information or documents either to the chit registrar or to the CID,” ADGP Sanjay said.

The CID has filed the criminal cases against the chit fund company amid the continuing face-off between the Ramoji Rao-led Eenadu group and the Y S Jagan Mohan Reddy-led YSRCP government. A bitter critic of the state government, Eenadu is often accused by CM Jagan Mohan of allegedly favouring the Telugu Desam Party and its chief Chandrababu Naidu.

The ADGP claimed that the severity of the alleged financial fraud could be gauged by the operational details of the Margadarsi group.

The AP government has attached movable properties of the Margadarsi chit fund company amounting to Rs 1,035 crore, including Rs 793,50,72,460 worth of properties attached on May 29 and Rs 242,03,08,637 attached on June 15. The total turnover of the Margadarsi group in AP and Telangana, as per the CID estimate, is Rs 9,677 crore.

The CID has said it found that the Margadarsi group has allegedly violated many key provisions of the Chit fund Act. “ Margadarsi group has diverted the subscribers’ money to HUF (Hindu Undivided Family)-controlled entities and also into high-risk stock market speculation such as mutual funds violating established laws of the land. Margadarsi group is forcibly taking deposits illegally in the guise of receipt against future subscriptions by offering them annual interest rate of 4-5 per cent,” the CID ADGP said.

“Margadarsi group has not furnished the balance sheet and accounts as required under the Chit Fund Act, 1982. Instead they are taking the plea that the preparation of financial statements as per the Companies Act is sufficient which is completely incorrect and wrong. Margadarsi group has indulged in the fudging of its books and accounts by ‘window dressing’ the balance sheet and by not submitting the required information. Instead of cooperating in the investigation process the accused are indulging in defaming and blaming the CID in various fora and by various means,’’ the ADGP charged.

When asked for a comment, the Eenadu group’s legal team declined to comment as the cases have been pending in the courts.

The Eenadu group, which also owns the Eenadu Telugu newspaper, had earlier accused the YSRCP government of allegedly promoting the sales of the Sakshi Telugu daily – which is owned by the family of CM Jagan Mohan Reddy – by releasing a government order (GO) last December. The GO gives an allowance of Rs 200 per month to 3.78 lakh employees and volunteers working with the ward/village sachivalayams (secretariats) to subscribe to one newspaper. Eenadu has charged that there was pressure on the sachivalayams’ employees and volunteers to subscribe to the Sakshi newspaper.

On March 28, the CID had issued a notice to Ramoji Rao under the CrPC Section 160 to appear before the agency with regard to the MCFPL case. The CID had then registered a case against the chit fund firm for allegedly violating the AP Protection of Depositors Financial Establishment Act, 1999 and the Chit Fund Act, 1982.

The CID had conducted raids on Margadarsi’s branches across AP and arrested four persons on March 12. On March 14, P Rajaji, the MCFPL

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vice-president, filed a petition in the Telangana High Court, seeking protection against any coercive action. The court directed the AP CID not to take any coercive steps against Ramoji Rao and C Sailaja until further orders.