The third Additional Chief Metropolitan Magistrate, Vijayawada, ordered 14 of days judicial remand for Chartered Accountant (*14*) Shravan, in reference to the Margadarsi Chit Fund Private Limited (MCFPL) case, on Thursday, based on Crime Investigation Department (CID) of the Andhra Pradesh police.
N. Sanjay, Additional Director-General of Police, CID, AP, Mangalagiri, stated in a press be aware that the courtroom thought-about the evidence produced by the CID and sent Mr. Shravan to 14 days judicial remand.
He stated that the CID, on Wednesday arrested Mr. Shravan, in reference to the irregularities within the MCFPL case. The police additionally seized his laptop computer and a quantity of data from him.
The CID registered seven FIRs beneath Sections 120(B) (prison conspiracy), 409 (prison breach of belief), 420 (dishonest) and 477(A) learn with 34 (falsification of accounts) of the Indian Penal Code, Section 5 of Andhra Pradesh Protection of Depositors in Financial Establishments Act, 1999 and Section 76,79 of Chit Funds Act,1982.
Mr. Sanjay stated MCFPL was being investigated for varied monetary irregularities, together with non-payment of month-to-month subscriptions/ instalments in respect of a number of tickets held within the identify of the Margadarsi, which have been later substituted with new subscribers.
“MCFPL was illegally diverting the amounts deposited by the chit subscribers to mutual funds and others to enable huge and unauthorised investments into the speculative markets. They also inflated the balance sheets citing unrealised cheques that never actually existed, towards the year end and got certified by auditors to the tune of hundreds of crores of rupees as balance on hand. No encashment of such cheques was seen in the bank accounts of MCFPL in the subsequent days.”, he stated..
The official stated that there have been different irregularities like, as an alternative of depositing the long run subscription quantity right into a second checking account as per the provisions of Section 22, Chit Funds Act ,the corporate was transferring the stated quantity to the Corporate Office Account and in flip, issuing a ‘receipt’ carrying curiosity on the charge of 4 to five% within the identify of the subscriber. The firm was additionally being investigated for its non-disclosure of income and expenditure account and assertion of property and liabilities and particulars of funding as per Rule 28 (learn with Section 24 of the Chit Fund Act)”.
During questioning by the CID officers Mr. Shravan reportedly admitted that he had not adopted due diligence and with out following due technique of verification of the branch-level monetary statements or financial institution statements, he had licensed the Annual Financial statements of MCFPL. This casts a shadow on the annual studies (together with the money reserves) submitted by MCFPL to the Registrar of Chits, the CID has concluded.
It was additionally discovered that rules of auditing have been conveniently ignored at varied ranges by Mr. Shravan, particularly when it got here to monetary statements of financial institution balances: each present and stuck deposits. The auditor couldn’t present affirmation of balances in banks — present and stuck deposits. “Confronted with the conformations obtained from banks by CID, the auditor could not explain the balances of fixed deposits shown on the balance sheet inflated by a few hundreds of crores.”, Mr. Sanjay claimed.
