Andhra Pradesh CID asks ED, I-T to probe Margadarsi scam
The APCID has written to ED, Income Tax and Serious Fraud Investigation Office(SFIO) to look into the Margadarsi Chit Fund Pvt Ltd scam.
Hyderabad: The Andhra Pradesh Crime Investigation Department(APCID) has written to Enforcement Directorate, Income Tax and Serious Fraud Investigation Office(SFIO) to look into the Margadarsi Chit Fund Pvt Ltd scam. The APCID chief N Sanjay said they are investigating Andhra Pradesh’s one of the “biggest financial frauds ever committed under the pretext of chit fund operations by exploiting the weak and innocent clients”.
He said, “During our investigation, we discovered illegal practices such as money laundering, fund siphoning, corporate frauds, assisting ghost subscribers in benami transactions, and tax avoidance. As these violations pertain to the domain of central enforcement agencies, we met them in Delhi and requested them to take timely action against the company.”
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He claimed that the company had violated The Chit Fund Act of 1982 by taking advantage of common people’s subscriptions to their associate companies and other unknown investments, laundering money by accepting large cash subscriptions, and forcing subscribers into keeping their money with the company by promising interest and security by irregularly accepting deposits.
He added that the company broke numerous important laws related to the Chit Fund Act. He claimed that MCFPL diverted subscribers’ funds into the extremely risky stock market, illegally and forcibly took deposits in exchange for future subscriptions at an annual interest rate of 4-5%, and failed to provide balance sheets and accounts as required by the Act.
“The company claims that the preparation of financial statements in accordance with The Companies Act is sufficient. Sanjay stated that the Margadarsi group “has engaged in the fudge of its books and accounts by ‘window dressing’ the balance sheet and not providing the necessary information.”
He also claimed that they are blaming CID instead of cooperating in the investigation.
