Hanamkonda: Akshara Chit Funds fails to return Rs 61 lakhs, offers low-quality flat instead

Hyderabad: M Narendra (name changed) is among several people duped by Hanamkonda-based Akshara Chit Funds. According to Narendra, when the chit fund company failed to pay back the prize money of Rs 61 lakhs after maturity, he was given a flat from one of the company’s real estate projects.

“But the 1,200 sqft flat I was given instead of the prize money is not even worth Rs 40 lakhs as per the market value,” Narendra said.

Victim invested Rs 70-80 lakhs in company

Akshara Chit Funds employed agents to collect deposits from clients and maintained a variety of chits, ranging from daily to monthly. Narendra and his family members made financial investments ranging between Rs 70-80 lakhs by combining different chits to fulfil their needs, much like thousands of other consumers.

Upon their maturity, Akshara Chit Funds did not provide them with the prize money. Instead, they made them take a flat in one of their real estate projects – Akshara Townships Private Limited in Hanamkonda.

However, the flat has not been completed to date.

Company diverted chit amounts to other projects

Explaining his plight to the NewsMeter, Narendra said, “For five to six years, we invested around Rs 70-80 lakhs in multiple chits organised by the Akshara Chit Funds. Until the Covid-19 pandemic, the chit fund company paid the prize money via auctions for the first few chits. After the pandemic, the chit fund company delayed the payment and instead of giving money on maturity, they kept making us visit their offices multiple times. However, all of a sudden, the company agents informed me that the company was not in a position to pay the prize money as it had diverted the money deposited by the subscribers to his various real estate projects and deposit bonds.”

Narendra said that they had requested the chit fund company to return the prize money instead of giving the flat. However, the chit fund company chairman Perala Srinivas Rao made it clear that he was not in a position to pay back the prize money upon its maturity and gave us around 1,200 sqft flat in one of his ventures under Akshara Townships Private Limited. Srinivas Rao founded the chit fund company in 2009 after working in Kapil Chit Funds for almost 18 years, he added.

Eventually, in February 2022, Srinivas Rao registered the flat instead of paying the prize money from the chits. At that time of registration, construction works related to a block of 15 flats was going on and it was registered under the Real Estate Regulatory Authority (RERA) Act, he said. But the construction has not finished yet.

Asked why he did not approach the police and file an individual complaint, Narendra said that in January, Warangal Police arrested Srinivas Rao following a series of complaints against him from the customers. He is now in the Karimnagar jail.

“In one of his meetings with the customers, Srinivas Rao informed us that he was not in a position to run the chit fund company anymore and agreed to provide a flat in his venture instead of returning the prize money for my multiple chits. With no option left, I accepted his offer and took a flat in Akshara Townships Private Limited in Hanamkonda,” he said.

The victim also said that Srinivas Rao duped them by giving them a 1,200 sqft flat for Rs 61 lakhs, which does not even cost around Rs 40 lakhs (as per the market value).

When questioned about the fraud, Srinivas Rao gave a Rs 2 lakh cheque in July 2023, Narendra said.

“However, when the cheques were deposited in the bank, we came to know that Srinivas Rao gave the cheques to the State Bank of India where the amount is nil in the account. In January, the Akshara Chit Funds tied up with Hyderabad-based Infinitee Services to recover and hand over the chit amount to the subscribers. So far, no measures were taken to hand over the chit amount to the subscribers,” he added.

When asked about his primary demand, Narendra said, “Srinivas Rao should either ensure the completion of the apartment and hand it over at the earliest, or pay the prize money of Rs 61 lakhs as promised.”