Margadarsi Chit Fund Scam: Andhra govt files defamation case against 'Eenadu' chairman Ramoji Rao

Amaravati: Andhra Pradesh government filed a defamation case against 'Eenadu' newspaper and chairman of Margadarsi Chit Fund Private Limited (MCFPL) Cherukuri Ramoji Rao for publishing a "baseless" article against the Crime Investigation Department (CID) and the government.

The newspaper allegedly leveled baseless allegations against CID and the government prompting the administration to initiate legal action.

Ramoji Rao, his son Kiran Prabhakar and daughter-in-law, Managing Director Shailaja Kiran, the daily's editor Nageshwar Rao, and the bureau chiefs of Andhra and Telangana Eenadu groups have been named in a case filed.

Addressing the media, Additional Advocate General Ponnavolu Sudhakar Reddy lambasted Ramoji Rao-owned Eenadu newspaper for publishing a baseless article to defame the Andhra Pradesh government.

"The publication has been spreading false information about the CID investigation into the Margadarsi Chit Fund scam. False, fabricated, and threatening news was written against the CID when the investigation agency is inquiring about the alleged illegal activities of Margadarsi Chit Fund Private Limited.", he said.

The Guntur principal sessions court has taken up the criminal defamation case. The AG notified the court that the article read - "Margadarsi Pai Kutra" has no basis whatsoever. Cases under sections 501 and 502, read with 120 B and 109 IPC, have been filed for the offenses committed.

"The practice of writing front page pieces in their newspapers bitterly critical of the government has become a routine. This particular publication keeps circulating fake news based on exaggerated assertions and opinions", he said.

He questioned why the newspaper is crying conspiracy when the constitutional system has the power to look into matters like Margadarsi Chit Fund Pvt Ltd.

Chit fund scam

In the chit fund scam, Additional Director General of Police CID N Sanjay attached movable properties worth Rs 1035 crore of MCFPL, and are now in the process of winding up 9 branches in Andhra Pradesh.

The chit fund company was found violating norms of the Chit Fund Act, 1982, diverting funds to their associate companies, and laundering money by accepting cash subscriptions in high amounts in violation of various prevailing laws.

Seven FIRs were registered upon the complaint of the Commissioner & IG, Stamps & Registrations, AP u/s 420, 409, 120(B), 477(A) read with 34 IPC and Sec 5 of APPDFE Act-1999 and Sec 76, 79 of Chit Funds Act 1982 of CID PS, AP, Mangalagiri.

The MCFPL established on August 31, 1962, at Hyderabad has a total of 108 branches in four states----Andhra Pradesh, Telangana, Karnataka, and Tamil Nadu. They have 37 branches in Andhra with 2351 chit groups and 1.04 lakh subscribers. For the finance year 2021-22, the annual turnover in both Andhra and Telangana states is Rs 9,677 Crores.

Ramoji Rao to be questioned today

AP-CID has summoned Cherukuri Ramoji Rao to appear before it for questioning on July 5, 10.30 am in connection with the Margadarsi chit fund scam. Ramoji Rao who is the primary accused in the scam was asked to appear in their regional office in Guntur.

Summons were also issued to other accused in the chit-fund case, and the CID is likely to question all the accused together.