Financial Advisor to look into the records
Hyderabad, December 21, 2006
Neither the Centre nor the Reserve Bank of India (RBI) appears to be inclined towards a probe in the affairs of Margadarsi Financers, the State Government has decided to act on its own. The State Government made two announcements on Thursday. One is constitution of a panel headed by financial expert N. Rangachari to probe whether Margadarsi has violated the statues in mobilizing deposits from the public and secondly authorizing a senior IPS officer to file applications and take necessary action under Sections 45(T) and 58(E) of the RBI Act of 1934.
The ruling party MP Undavalli Arun Kumar ranked up the issue a month ago when he lodged a complaint with the Union Finance Minister alleging that Margadasi collected deposits of over Rs. 1200 crores in gross violation of the Acts and that a probe is necessary. The RBI did not go beyond telling the Margadarsi to stop collecting deposits since a Hindu Undivided Family (HUF) was not empowered to do so as RBI has not received any complaint from any depositor for not payment.
Taking note of the reports that Margadarsi has huge accumulated losses, a GO issued on Thursday said that the government had a bounded duty to take deterrent action against any financial institution indulging in malpractices during the course of acceptance of deposits. As per the order, Rangachari, advisor to the government (Finance) will examine all relevant papers, study violation of acts and if there is any reason to believe that the financial establishment is acting in a manner prejudicial to the interests of depositors and is not likely to return the deposits. In the latest development, MP Arun Kumar on Thursday submitted an application to the Chief Commissioner of Income Tax seeking information about 23 sister organizations of Margadarsi Group including Margadarsi Financers under RTI Act.
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