The Telangana high court on Thursday directed that the Crime Investigation Department (CID) of the Andhra Pradesh police not to take punitive action against 15 employees of the Margadarsi Chit Funds Private Limited (MCFPL), who were grilled by the agency in connection with the alleged irregularities in the company, people familiar with the matter said.
Acting on a lunch-motion petition filed by Margadarsi Chit Funds, a high court bench headed by Justice B Vijaysen Reddy ordered that the CID police should not arrest the employees in the name of non-cooperation.
The company representatives alleged that the CID authorities, who had conducted day-long raids in its headquarters in Hyderabad on Wednesday, threatened to arrest them, if they refused to succumb to their pressure.
Counsel for the Andhra CID Govind Reddy said the searches in the Margadarsi company headquarters were completed and no arrests were made. The high court posted the case to April 28 for further hearing.
An official familiar with the development said the CID authorities issued fresh summons to Mardarasi Chit Funds managing director Sailaja Kiran for appearance before them for questioning again on Friday. “Notices would also be issued to Margadarsi chairman and media baron Ch Ramoji Rao for appearing before the investigating officer soon,” he said.
On Wednesday, the CID authorities asked central probe agencies like the Enforcement Directorate (ED), the Income Tax (I-T) department and Serious Fraud Investigating Office (SFIO) authorities to probe the alleged irregularities in the Margadarsi Chit Fund.
The CID officials led by additional director general of police N Sanjay met the authorities oc Central agencies in Delhi and lodged a complaint against Margadarsi for alleged violations of the law after it found cash deposit records of the group were “bloated,”
Sanjay told reporters that the group raised deposits “without permission of the RBI,” and “diverted” the amount collected from the depositors to speculate in the “risky stock market”.
He also said the CID suspected that the people making deposits in the chit-fund company could be “common people or fictitious.” He added that while there were no complainants in the case, the Andhra Pradesh government could not be a “silent spectator” to these alleged violations.
The ADG also said the chit fund company had not been 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 CID had filed seven FIRs against the group and arrested five people, he said.
Meanwhile, Margadarsi Chit Funds, in a statement to the media, denied the charges levelled by the CID authorities. “The entire exercise is part of a large scale conspiracy to attack the financial roots of the company. The CID authorities are trying to create some sort of fear psychosis among the subscribers of the chit fund company,” a company spokesperson said in the statement.
He further alleged that the CID authorities were stalling the day-to-day activities of Margadarsi Chit Funds and were not allowing the fresh subscribes to put in their money. “We shall fight the legal battle against the deliberate attempt by the Andhra government to target the company,” the spokespersons said.
