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Ex-Cong MP targets Ramoji Rao over Margadarsi chit fund scam, demands ED probe
Former Congress MP, Vundavalli Arun Kumar claimed that Ch Ramoji Rao had signed in the balance sheet of Margadarsi Chit Funds for the year 2021-22 as the chairman of the company
Former Congress parliamentarian, Vundavalli Arun Kumar on Monday challenged media baron and Eenadu group chairman Ch Ramoji Rao’s claim that he was not part of the firm linked to the alleged ₹2,600 crore Margadarsi Chit Funds scam in Andhra Pradesh and demanded that the central government order an investigation by the Enforcement Directorate (ED) or the Securities and Exchange Board of India (SEBI) into the case.
Addressing a press conference at Rajahmundry on Monday, the former MP, who filed a petition over the alleged scam in the high court of the combined Andhra Pradesh in 2006, presented the balance sheet of Margadarsi Chit Funds for the year 2021-22, and said that Rao had signed the document as the chairman of the company.
He alleged that the collection of deposits by Hyderabad-based Margadarsi Financiers, a group concern of Margadarsi Chit Funds, was in violation of the Reserve Bank of India Act. He said that Margadarsi Financiers is a Hindu Undivided Family (HUF) concern promoted by Ch Ramoji Rao and as per the RBI rules, it cannot collect deposits from the public. However, the company had mobilised ₹2,600 crore from people in the form of deposits, he alleged.
He said he had filed a case in the high court against Margadarsi in 2006 itself during the combined Andhra Pradesh regime, but the state high court in 2014 dismissed the case after Rao claimed that he was not part of HUF.
“In 2020, I challenged the high court verdict in Supreme Court. On August 20 this year, the Andhra Pradesh government also impleaded in the case by filing a special leave petition, accusing Margadarsi Financiers of being guilty of violation of not only the provisions of the Reserve Bank of India Act but also the provisions of the Income Tax Act and also the Andhra Pradesh Protection of Depositors of Financial Establishments Act, 1999,” he said.
On September 19, the Supreme Court served notices on Margadarsi Financiers and also allowed the Reserve Bank of India (RBI) and others to implead in the case, the former MP said.
“Even the affidavit submitted in the Supreme Court bore the signature of Rao as the rightful owner of the company,” he claimed.
Till August 20, 2012, the Margadarsi Financiers had a bank balance of ₹1,688 crore but Rao had not revealed where the company got such a huge sum of money, he claimed.
The ex-MP said the Supreme Court wanted to know whether or not the deposits had been refunded to the depositors. Regardless of whether deposits had been refunded or not, the moot question was whether HUF was entitled to accept deposits, he added.
There was no immediate reaction from Rao to Kumar’s allegations. No official of Margadarsi Financier could be reached for comment.
In August this year, Union home minister Amit Shah’s meeting with 86-year-old Rao during the former’s visit to Hyderabad triggered speculation that they might have discussed the possible restoration of alliance between the Bharatiya Janata Party (BJP) and the Telugu Desam Party (TDP) in Andhra Pradesh ahead of the next elections. Rao has been a supporter of the Chandra Babu Naidu-led party right from its inception in 1982.
