The Andhra Pradesh Crime Investigation Department (CID) has served notices to the top management of Margadarsi Chit Funds Private Limited (MCFPL) amid an investigation into a Rs 2,600 crore scam. The chairman of MPCL, Cherukuri Ramojj Rao, and his daughter-in-law Cheruki Sailaja, have been summoned by the CID on either March 29, March 31, April 3 or April 6. A First Information Report (FIR) had been filed against the both of them and several branch managers of the chit fund, accused of diverting funds from its subscribers for personal use.
Searches were conducted in the premises of the offices in November 2022 for three days continuously. The chit fund owners, however, alleged that they are being targeted by the state government by trying to "create false evidence of violations" because they could not find any violations. A statement issued by the owners after the raids said, "As they could not find anything wrong even after three days of searches, the depressed official machinery as a last resort created a document with fictitious violations and faults. They added a twist in it so as to use it against Margadarsi in court. They kept pressuring managers to sign this document."
Margadarsi Chit Fund was accused of collecting money from its depositors in violation of Reserve Bank of India guidelines. The case against it was first filed by former minister Undavalli Arun Kumar in 2006. However the case was dismissed in 2014 by the High Court after Ramoji Rao disassociated from the chit fund company. In 2020, Arun Kumar had approached the Supreme Court challenging the 2014 High Court verdict, after which the Andhra Pradesh government impleaded the case.
The Stamps and Registration department has been carrying out searches in several locations of Margadarsi offices since November 16. In a media statement, the Stamps and Registration department said that during the searches, officials seized records and materials relevant for proceedings under the Chit Funds Act, 1982. “Further evidence of diversion of funds, non-payment of GST, and not giving security under section 31 (of Chit Funds Act) were collected.