The Andhra Pradesh Registrar of Chits on Sunday, July 30, issued a notice to subscribers of several chit groups under Margadarsi Chit Fund Private Limited pointing out the various alleged financial irregularities, criminal violations and diversion of funds. In the ongoing battle between the Jagan Mohan Reddy-led Andhra Pradesh government and Margadarsi Chit Fund Private Limited, owned by media baron Ramoji Rao, the Registrar published advertisements in several newspapers and said that it had taken a tentative decision to wind up the chit groups.
“If the members of the Chit group have any objections/concerns, the Chit subscribers of the groups are required to send them in writing to the Deputy Registrar of Chits within 15 days from the date of publication of this notice,” the notice read.
The Registrar said that during their investigation, the Assistant Registrars of Chits detected several irregularities, diversion of funds and violations of provisions of the Chit Fund Act 1982 and AP Chit Fund Rules 2008.
The notice said that the Deputy Registrar of Chits, responsible for protecting the interests of the chit subscribers, prima facie found that the chit groups had violated the provisions of the Chit Fund Act.
All the violations committed by Margadarsi are on the Registrations and Stamps website, it said. “After considering the reports of the Assistant Registrar of chits, a tentative decision is arrived at to wind up the said chit groups. If the members of the Chit group have any objections/concerns, the Chit Subscribers of the above groups are required to send them in writing to the Deputy Registrar of Chits within 15 days from the date of publication of this notice,” the Registrar said.
“For the tickets held in the name of Margadarsi Chit Fund Pvt Ltd, the payment was made by the subscription money paid by the unrelated members of the group (other chits group) but not paid by the company. This is a major violation. As per the provisions of the Chit Fund Act, tickets held in the name of the Company (vacant chits) shall be paid by the company, i.e., Margadarsi Chit Fund Private Limited, out of its own funds. As the chit company instead of paying chit subscriptions from its own funds, diverted the money of the subscribers belonging to other groups, it was found that the prized subscribers (premium subscribers) were being paid with inordinate delays. Payments to prized subscribers were delayed for more than four months in some cases,” the notice read.
While amounts should not be accepted from chit members without obtaining proper permissions before commencing a new chit, Margadarsi received funds from the public arbitrarily flouting all the provisions of the Chit Fund Act, it said.
The prized chit subscribers who bid for their financial emergencies were not being paid prize money on time, the Registrar said.
The Registrar said that the company has been making the defaulting subscribers as prized bidders and was illegally diverting chit amounts. The notice added that Margadarsi violated the Chit Fund Act by non-filing of the balance sheet, profit and loss accounts of the company with the regulatory authorities as per the provisions of Schedule II, as per Section 24 and Rule 28 of the Chit Fund Act, 1982.
On Friday, July 28, the CID had attached properties worth Rs 15.81 crore of Margadarsi in the alleged chit fund scam.
Responding to the notice, Margadarsi in a media statement said, "In continuation of their malicious agenda, the Government through its Registrars now have issued an advertisement in the print media in the form of notice to subscribers levelling the same imaginary, arbitrary and perverse allegations. The Registrars have gone on to make these allegations when the subject matter is still subjudice in Courts and they have not filed any counters to writ petitions filed by the Company."