The Stamps and Registration Department officials have laid their hands on Shriram Raghavendra Chits Private Limited, more popularly known as Shriram Chits, in the state.
The officials raided six offices of Shriram Chits located in Nellore, Kurnool, Nandyal, Anantapur, Kadapa, and Tirupathi.
In the initial raids, it was observed that the company was found to be violating various provisions of the Chit Funds Act, 1982.
During the inspections carried out in the chit units of Shriram Chits, certain violations and procedural irregularities, as per the Chit Funds Act, 1982, were noticed.
The inter alia lapses and irregularities noticed during the inspections include delays in the payment of prized bid amounts which took more than one month and, in some cases, took 4 to 5 months for payment of bids.
It was also found that the cash on hand and cheques on hand did not match the amounts shown in the finalized balance sheet.
It was further noticed that the same cheque number was used to pay for different and unrelated parties.
Shriram Chits had caused huge delays in presenting the cheques to banks, which were received on March 31, 2022.
It has been observed that there is a huge difference between the bid payable outstanding amount and the amount lying in the 2nd account.
The foreman/company is not closing the day end on 31st March, and the cheques received on subsequent days are also shown to be received on 31st March, which shows that the company/foreman is manipulating the daily accounts and fudging the balance sheet, which is a violation of the Chit Funds Act.
The foreman has not shown evidence of payment of subscriptions in respect of the tickets held by the foreman, where the foreman is the non-prized subscriber.
The foreman has not shown evidence of payment of subscriptions in respect of the tickets held by the foreman, where the foreman is the prized subscriber.
The balance sheet maintained by the company is not as per the Chit Funds Act, 1982. Furthermore, 10% of the profit booked in each year has to be transferred to the Statutory Reserve, but the company has not shown any such transfer to the Statutory Reserve in the Balance Sheet.
It is observed that the arrear collection of subscriptions from the subscribers pending for more than 3 months ran into crores, but the foreman paid the prize monies to the prized bidders. The details from where the foreman met the amount could not be explained, and it shows that the company has appropriated the statutory reserves, which is not as per the provisions of the Chit Funds Act, 1982.
The officials further said that the Balance Sheet in Part-I & II, as per Section 24 of the Chit Fund Act, was not filed.
They also noticed that the receipts and expenditure account and statement showing the assets and liabilities of individual Chit Group were not filed as per Rule 28(2) of A.P. Chit Fund Rules, 2008.
The officials have issued memo No. CF/3008/2023, on May 3, instructing all the Deputy Registrars of Chits and Assistant Registrars of Chits to take necessary action.