Irregularities found in 35 chit fund companies

Vijayawada: Commissioner of state Registration & Stamps department, V. Ramakrishna, said on Friday that irregularities were detected in 35 chit fund companies in Andhra Pradesh and legal action would follow.

As per the Chit Funds Act, such companies have to provide six types of information like their assets, liabilities, expenses, receipts, investments and reserve funds, every year.

There exist 587 branches of about 423 chit fund companies, through which 6,868 chit groups are working and their annual turnover was Rs 638.99 crore, he said.

The commissioner was speaking to the media after a workshop for deputy and assistant registrars here on Friday. “There are about 2.48 lakh chit account holders. The workshop aimed at creating awareness about chit fund companies among the public and also guiding the officials on chit funds law, he said.

Officials from DRI also came for the workshop and created awareness.

Ramakrishna said he has seen the Margadarsi Chit Fund advertisement on the checks done there. He affirmed that legal action will be taken if any company does not provide required information.

“Chit companies are collecting deposits in the name of security. Improper payment of interest and non-maintenance of separate balance sheets were identified in the inspections on such units, he said.

Ramakrishna said all the companies except the Margadarsi are giving the information the authorities sought. A special audit would be conducted on the Margadarsi. Auditors and forensic experts would go to Margadarsi's headquarters and conduct inspections.

Officials have asked for the details to know the financial status of the Margadarsi company but the company did not provide any information, he said and asked how reasonable it was for Margadarsi company to give the details in Telangana or Karnataka while doing business in Andhra Pradesh.