Govt appoints two senior officers to probe Margadarsi issue

Hyderabad, Dec 21 (UNI) Andhra Pradesh government today appointed two senior officers to go into the affairs of the Margadarsi Financers, owned by the family of a newspaper baron.

An official release here said the government had appointed its Financial Adviser N Rangachari to examine all the relevant papers and other materials and submit a report whether Margadarsi Financiers had raised deposits from the public, in voilation of the provisions of the RBI Act or under the provisions of Andhra Pradesh Protection of Depositors of Financials Act.

The government had also directed the officer to ascertain if there was any reason to believe that the financial establishment was acting in a manner prejudicial to the interests of the depositors.

The release said the government, as per the provisions of the Andhra Pradesh Protection of Depositors of Financial Act of 1997, was committed to take deterrent action against financial establishments indulging in malpractices during the course of accepting public deposits.

The government also appointed Inspector General of Police Krishna Raju as the Authorised Officer to file applications in courts of jurisdiction and take other action as enjoined under the provisions of the RBI Act of 1934 and in particular the officer was also authorised to take action under sections 45(T) and 58(E) of the Act.

It may be recalled that certain media reports earlier pointed out that the Margadarsi Financiers was not an incorporated body as it was owned by a Hindu undivided family and was consequently not expected to receive deposits from the public as per the provisions of the Reserve Bank of India (RBI).

Reports also pointed out that the company was running on loss and was reported to have raised deposits from the public in excess of Rs 2,000 crore.

UNI JRK AJ 1933