The Central Bureau of Investigation (CBI)’s probe into the Saradha chit-fund scam has allegedly found key irregularities in the accounting practices of the accused group firms, including the fact that most had a common auditor while a lead firm was not permitted to collect deposits by its own Memorandum Of Association (MOA).
“There were significant irregularities in the accounting practices of the Saradha group firm under our scanner that sought to mask facts. All of them were shown to be debt-free firms; the outstanding loans in their financial statements were partly of investors, other group company loans and advances,” said a CBI source.
He said, “The audited financial statements misrepresented the facts and the statutory auditor was negligent in discharging his duty of presenting the facts related to the firm.” The source added, “We also found that most of the group firms had a common auditor which was odd.”
The probe has indicated that the firm allegedly misrepresented its business in writing to the Income Tax department, the depositors and the Securities and Exchange Board of India.
Besides, a key group firm, Saradha Realty India Limited, which allegedly helped it collect deposits around Rs 2,460 crore via lucrative investment schemes and by employing a huge number of agents, was “not permitted to do so by its own MOA,” said the source.
“Its MOA does not permit the company to collect deposits,” said the source. This was apart from the fact that the firm did not have the requisite authorisations from regulators like the SEBI and RBI to operate the investment schemes, according to the source. The depositors were allegedly promised high fixed-interest returns in the garb of travel packages, land purchases and flat advances, said the source.