Margadarsi not in position to refund deposits now: Commission

Hyderabad, Feb 22 (UNI) Holding that Margadarsi Financiers, owned by media baron Ramoji Rao, was raising deposits as ''in contravention of Section 45 of the Reserve Bank of India'', the Rangachari Commission has opined that the firm was now ''not in a position to refund public deposits in full because of their legal inability to raise any more deposits''.

The Commission, in its report submitted to the Andhra Pradesh government, a copy of which was released to the press here today, stated that the funds of the firm, 'apparently' of a Hindu undivided family assesses as such to income tax, had been irretrievably lost by more than 50 per cent by way of business losses and the greater part of the balance were invested in illiquid assets.

''Unless it is able to inject funds either by way of fresh borrowings (which it could not raise as deposits from public) or realise any part of their businesses by way of sale or infusion of equity, the public deposits are incapable of being refunded'', the report said.

''To that extent, therefore, I hold that the Margadarsi Financiers is likely to default in the return of deposits on maturity and its present activity of utilising deposits raised to fund its ever-mounting losses and for reinvesting in subsidiary companies will amount to their acting in a manner prejudicial to the interests of the depositors'', Mr Rangachari said.

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