AP CID arrests Margadarsi auditor for abandoning due diligence
Officials seized his laptop along with some records from his possession
By Newsmeter Network Published on 31 March 2023 2:45 AM GMT
Mangalagiri: Sleuths of Andhra Pradesh Crime Investigation Department (CID) has arrested a chartered accountant for "abandoning due diligence and due process" in certifying the annual financial statements of Margadarsi Chit Funds Pvt Ltd (MCFPL) on Thursday.
The arrested is Kudaravalli Shravan (44), partner of Brahmayya & Co. Officials seized his laptop along with some records from his possession.
"Shravan admitted that he had not done due diligence and, without following due process of verification of the branch-level financial statements or bank statements, he had certified the annual financial statements of MCFPL," CID chief and Additional Director General of Police (ADGP) N Sanjay said in a statement.
He said these developments had cast a shadow on the annual reports (including the cash reserves) submitted by MCFPL to the Registrar of Chits.
The senior IPS officer noted that the principles of auditing had been ignored at various levels by the accused, especially when it came to financial statements and bank balances, both current and fixed deposits.
The auditor had failed to provide confirmation of balances in banks, ADGP Sanjay said, and when confronted with evidence procured from the financial institutions, the auditor could not explain the balances of fixed deposits which had been inflated by a few hundred crores of rupees.
Police produced Shravan before the Third Additional Chief Metropolitan Magistrate in Vijayawada on Thursday and sent him to judicial remand for 14 days.
Notices to Ramoji Rao
On March 28, CID issued notice to Cherukuri Ramoji Rao, the chairman of Margadarsi Chit Fund Private Limited (MCFPL), and his daughter-in-law Cherukuri Sailaja, MD of MCFPL, in the chit fund scam. Both of them were asked to make themselves available at their residence or office for questioning either on March 29, March 31, April 3, or April 6. Given the dates, CID asked them to inform the convenient date for questioning.
Multiple raids:
On March 11, the teams of the CID launched searches at the premises at the branches of Margadarsi Chit Fund Pvt Ltd in Visakhapatnam, Rajamahendravaram, Eluru, Vijayawada, Guntur, Narasaraopet, and Ananthapuramu branches. According to the CID officials, the foremen of these branches are being questioned about the alleged chit-fund fraud. All the records are being examined, and incriminating documents are being seized.
Inputs from PTI
