How Margadarsi ran chit scam with funds from ‘ghost subscribers’

Vijayawada: Additional Director General of Police (ADGP) for AP CID, N Sanjay, has taken a firm stance against misleading articles that have been circulating regarding the ongoing CID investigation into the Margadarsi Chit Fund. ADGP Sanjay shed light on the scale of the Margadarsi Chit Fund scam, emphasising the importance of truth and transparency in the face of distorted narratives.

ADGP Sanjay pointed out serious violations of chit-fund regulations committed by Margadarsi, resulting in substantial financial losses for investors who had placed their trust in the scheme. He confirmed that the Income Tax (I-T) department and the Enforcement Directorate (ED) have been alerted to the alleged Margadarsi fraud, underscoring the gravity of the situation. He said that over 800 victims of high-value chit schemes suffered a collective loss exceeding Rs 100 crores.

ADGP further exposed Margadarsi for misleading investors by falsely claiming strict adherence to all regulations. He brought to light a pattern of fraud within every chit group, encompassing issues such as check preparation, ledger discrepancies, and the harassment of subscribers.

ADGP Sanjay also raised concerns about the company’s alleged involvement in collecting funds under the guise of ghost subscribers. He highlighted that a substantial 40 per cent of chit groups within the Margadarsi Chit Fund operated without any subscribers. He also noted practices like the prolonged extension of auctions and the operation of chit groups devoid of subscribers.

ADGP Sanjay voiced his concern over the investigation’s challenging lack of cooperation, especially from the main accused i.e., Margadarsi Chit Fund chairman Ramoji Rao and managing director Shailaja Kiran. He underscored the necessity of thoroughly examining Margadarsi Chits’ operations and disclosed that some media reports inaccurately portrayed the CID’s efforts as causing disruptions in everyday business activities.

ADGP has voiced heightened concerns about the situation of approximately 3,000 subscribers who remain unaware of the payments they’ve been making to Margadarsi Chit groups. The investigation has also identified around 100 ghost subscribers, who have had their Aadhaar, and other details used without their knowledge. The CID is probing how various companies managed to pay substantial amounts for multiple chits.

Victim’s account

Annapoorna Devi, a victim of the Margadarsi Chit Fund scam, shared her harrowing eight-year ordeal. She recounted how she and her family had suffered immense financial burdens and harassment due to the scheme’s deceitful practices. She revealed the devastating impact on her life, including the loss of property and the inability to fulfil her daughters’ dreams. Annapoorna Devi called upon authorities to take severe action against those responsible for this conspiracy, emphasising that justice must be served for victims like her who have been left in dire straits.

ADGP had further added, raising concerns about threatening phone calls made to Annapoorna Devi by MD Shailaja Kiran through PA Sasikala, potentially obstructing the CID’s investigation. The investigation has also delved into a complaint from Annapoorna, which revealed the forgery of signatures, including the signature of her daughter Priyanka who lives abroad. This fraudulent activity resulted in substantial losses. ADGP Sanjay expressed concern about branch managers within the Margadarsi Chits organisation who have allegedly forged agents’ signatures, as evidenced in the Narasaraopet branch.

Additionally, the CID is investigating a builder in Vijayawada, exploring whether payments worth Rs 50 crores are made in cash or via cheques.