CM hints at probe into Margadarsi finances

TNN / Nov 9, 2006, 02:26 IST

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CM hinted at the state favouring speedy inquiry into allegations of financial impropriety against Margadarsi Financiers owned by media baron Ramoji Rao.

CM hints at probe into Margadarsi finances

HYDERABAD: Chief minister Y S Rajasekhara Reddy on Wednesday hinted at the state favouring speedy inquiry into allegations of financial impropriety against Margadarsi Financiers owned by media baron Ch Ramoji Rao.
A political row has been kicked off in the state after such allegations were made by Rajahmundry Congress MP Aruna Kumar Vundavalli.
Speaking to reporters in New Delhi after meeting finance minister P Chidambaram, the chief minister said, "Aruna Kumar has made basically two allegations.
One that Margadarsi Financiers is collecting deposits in contravention of the law and the second that the firm is losing Rs 250 crore every year and that the profits of all group companies put together are not more than Rs 30 to 40 crore which raises issues of liquidity.

Every year, heavy deposits are being mobilised to cover its losses. This issue figured in my meeting with Chidambaram."
More importantly, the chief minister said, "It is basically for the Government of India and the RBI to take appropriate action in such situations.
The state government has little role in such cases. But when Prudential Bank collapsed, there was lot of pressure on us from depositors.
Hence, we want the RBI to take appropriate action as per law to protect the interests of depositors. The finance minister told me that the issue has been brought to his notice and that it is being examined."

Margadarsi Financiers managing director Shailaja Kiran told TOI that only those depositors whose amount had matured sought to withdraw the money on Wednesday. "Others whose amounts have not matured as yet did not withdraw the money,"she said.
Meanwhile, Aruna Kumar hinted at launching an agitation against Margadarsi Financiers if it does not make public the details of its assets and liabilities and explain under what rules an unincorporated company was collecting huge deposits from the public.
At a press conference on Wednesday, he said that instead of clarifying the questions raised by him, the company bosses were resorting to mud-slinging against him and the Congress party. He said the company was trying to "manufacture consent" to show that all was well and that it enjoyed unflinching faith among public.
Asked why the operations of the finance company were never questioned by the RBI or by any government in the last 32 years, Aruna Kumar said that was because of the "larger than life"image of Ramoji Rao.
When asked if the law differentiates between persons based on their status, he hastened to add that any agency would act only when there are complaints. "So far no one has lodged any complaint," he added.
Meanwhile, Telangana Rashtra Samithi president K Chandrasekhara Rao said the charges against the finance company owned by Ramoji Rao was nothing but vendetta being unleashed by the Congress against its opponents.
"As far as my knowledge goes, the Margadarsi records have been blemishless. Aruna Kumar's charges are nothing but a counter-attack by the ruling party against reports of wrongdoings of the state government," he said at a press conference on Wednesday.

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