The Andhra Pradesh government headed by Chief Minister Jagan Mohan Reddy, has given its permission to the CID of police to attach properties worth Rs.793,50,72,460 of the Margadarsi Chit Fund Pvt Ltd in relation to the chit funds scam.
Home principal secretary Harish Gupta issued GO 104 on Monday and an ad-interim order for attachment of properties of MCFPL, duly authorising the additional director general of police, CID, to take possession and have control over the attached movable properties and file an application before court.
The CID carried out inspections on November 15, 2022 at branch offices of MCFPL in AP and found a host of offenses and violations of provisions of Chit Funds Act, 1982 under sections 27, 32,31,24 and other provisions.
It noticed that the chit fund collections from the branch were being transferred to the corporate office and the amounts in turn were being invested in mutual funds.
The company was engaging in criminal activities by creating an ingenious and vicious cycle of perpetrating fraud, cheating, criminal breach of trust and wrongful confinement for its own gains at the cost of gullible chit subscribers for non-payment of subscription amounts and violated to maintain bank accounts to mask the fraudulent activities and illegal deposit scheme, it was alleged.
Officials also noticed that the company was not in a position to pay the amounts to the subscribers on demand and the company was also involved in diversion of funds to other investments illegally in violation of RBI regulations and the provisions of Section12 of the Chit Fund Act, 1982 and it was also an offence under section 5 of the AP Protection of Depositors of Financial Establishmnt Act, 1999.
