The flashing of news by TV channels that Vuma chit funds had gone “bankrupt” and its chairman K. Umamaheswarudu had gone into hiding triggered an alarm in the city on Saturday morning.
The middle-class families that deposited their hard-earned money in chit funds and finance arms of the group began lining up in front of the Satyanarayanapuram police station, while a few others rushed to the offices to know what actually happened.
Complaints continued to pour in with the police. Umamaheswarudu has been in the finance business for the last four decades and residents of Satyanarayanapuram, Ayodhya Nagar, Kedareswarapet, Gandhi Nagar and Devi Nagar areas form a huge chunk of the customer base of Sai Vuma Chit Fund Company Private Limited and Vuma Finvest Private Limited, which are units of the Vuma group.
As most of the customers happen to be from the middle class families, they appeared completely shell-shocked and distraught by the developments. It was learnt that a few affluent businessmen from the city too invested in the companies.
Besides the depositors and mediapersons, local corporators and a few political leaders visited the police station to gather details of the case, which was described as one of the biggest white-collar offences in the city in the recent past. Those who gathered outside the police station recalled how Sailatha Chit Funds, which was closed recently, and a few other chit fund and finance companies in the city duped the public in the recent times by offering attractive rates of interest on their investments.
A few depositors exuded confidence that the investments could be recovered as Vuma Resorts at Donabanda owned by the group was worth crores of rupees. Still, the fear of non-payment of dues by the company loomed large and the number of people pouring into the police station had only increased as the day passed.
By late Saturday, the Satyanarayanapuram police received about 150 complaints, in which depositors accused the company of deceiving the public to the tune of about Rs. 4 crores.
The police gave a similar response to all the complainants, saying investigations were on and the accused would be nabbed. Rumours spread within no time that a couple of elected representatives of the ruling party were exerting pressure on the police.