Officials of the department of the registrar of chit funds landed in Hyderabad on Wednesday to conduct inspections in the head office of Margadarsi Chit Funds, promoted by Eenadu group chairman Ch Ramoji Rao, to dig into the alleged violation of rules of the Reserve Bank of India (RBI).
A team of officials led by district registrar of chits, Vijayawada, V R R Prasad, swooped on the head office of Margadarsi Chits Pvt Ltd. Hyderabad.
Initially, Margadarsi employees led by H R Manager M Subramanyam raised some objections, but later allowed the inspection.
The Inspection Team commenced their work at 11.50 am and continued their searches of records till evening. S Venkataswamy, Margadarsi Finance Director & his team produced the records.
“Inspection concluded at 7 pm and will continue on Thursday,” an official statement said.
It may be mentioned that last week, the authorities of the Registrar of Chits announced that they would conduct forensic audit of the accounts of Margadarsi Chit Funds Private Limited.
Inspector General of Stamps and Registrations and Andhra Pradesh Registrar of Chit Funds V Ramakrishna said state-wide inspections conducted by the department on as many as 35 chit fund companies in three phases in the last few days revealed large scale financial irregularities.
In a preliminary assessment, the department found major violations by chit fund companies for accepting deposits in the name of security, offering interest payable, and not maintaining separate balance sheets.
They were also found to have siphoned the money and diverted it for non-chit Fund activities; accepted fixed deposits which is against rules etc.
The IG said the department would issue show cause notice and conduct a forensic audit of Margadarsi Chit Funds.
“But the company authorities have not cooperated with the authorities. Margadarsi has been ordered to provide details of the second account, but until today, details have yet to be submitted,” he said.
The IG said the department would further conduct inspections at the Hyderabad branches of Margadarsi in cooperation with Telangana authorities.