Involved in chit fund business and money circulation schemes, in violation of government guidelines
Some 10 directors of a real estate company, which collected huge amounts of money as deposits from the public, besides indulging in chit fund business and money circulation schemes, in violation of government guidelines, were arrested by the City Police on Saturday. M/s Sri Chakra Gold Farms & Villas (India) Ltd., which has its head office in the city and 25 branches in AP and Bellary in Karnataka, was incorporated as a public limited company in December 2010. The company had permission only to do real estate business as per the Registrar of Companies certificate. It, however, collected Rs.15.18 crore as deposits from around 32,000 customers.
The company started Sthirasthi Chitfund Private Limited and also a mall named ‘Sri Chakra Shopping Mall’ to further their business interests.
Initially, Darisi Aruna Devi, D. Narendra and N. Anil Kumar were the directors and in July 2011 one Boddepalli Giribabu was appointed additional director. They lured the public in the name of daily, monthly and fixed deposit schemes in a deceitful manner. The company had not only been collecting unauthorised deposits from the public but also indulged in illegal money circulation schemes. The real estate business and sale of land were meant to dupe the public and collect deposits.
The third director Giribabu also diverted the company funds by selling his own land to the company at a higher rate than the market value and was instrumental in developing the illegal business of the company.
The police found out that the company had repaid maturity amount of about Rs.5.26 crore to about 8,000 depositors so far. The properties acquired by the company at the present market value were valued at about Rs.2.2 crore, while the company has to pay Rs.8 crore with interest to about 24,000 members, Police Commissioner B. Shivadhar Reddy told a media conference on Saturday.
The accused were booked under Sec 120-B, 406, 420 IPC and Section 5 of AP Protection of Depositors Act and Sections 4 and 5 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
Mr. Shivadhar Reddy said that two cars and original un-registered agreements, worth Rs.27.50 lakh, entered into by the accused, were seized. Deputy Commissioner of Police (Law and Order) P. Viswa Prasad spoke. Additional Deputy Commissioner of Police (Special Branch) Mohd. Khan, Assistant Commissioners of Police D.N. Mahesh (East) and C.M. Naidu (North) were present.
Two Town Inspector R. Mallikarjuna Rao and DFIT Inspector B. Tirumala Rao are investigating the case.