The officials of the Stamps and Registration Department of Andhra Pradesh found several financial irregularities committed by the Shriram Raghavendra Chits Private Limited, which is known as Shriram Chits.
The officials conducted raids on the offices of the Shriram Chits in the state at Kadapa, Kurnool, Nandyal, Tirupati, Anantapur and Nellore districts on May 3. They have observed that the company is found to be violating the various provisions of Chit Funds Act, 1982.
During the inspections carried out in the chit units of Shriram Raghavendra Chits Private Limited certain violations and procedural irregularities as per Chit Funds Act, 1982 were noticed, the officials said.
Delays in payment of prized bid amounts which took more than one month and, in some cases, took 4 to 5 months for payment of bids, the officials said in a statement. Cash on hand and Cheques on hand are not matching with the amounts shown in the finalized balance sheet, they added.
The foreman has not shown evidence of payment of subscriptions in respect of the tickets held by the foreman where the foreman is the non-prized subscriber, the officials said and added that the foreman has not shown evidence of payment of subscriptions in respect of the tickets held by the foreman where the foreman is the prized subscriber.
The balance sheet maintained by the company is not as per the Chit Funds Act, 1982, they said adding that 10 percent of the profit booked in each year has to be transferred to Statutory Reserve. However, the company was not showing any such transfer in the Balance Sheet, they added.
It is observed that the arrear collection of subscriptions from the subscribers pending for more than 3 months ran into Crores, but the foreman paid the prize monies to the prized bidders. The details from where the foreman met the amount could not be explained and it shows that the company has appropriated the statutory reserves against the provisions of the Chit Funds Act, 1982.
Receipts and Expenditure Account and Statement showing the Assets and liabilities of individual Chit Group was not filed as per Rule 28(2) of AP Chit Fund Rules, 2008. The officials have directed the deputy registrars of these districts to take further action against the Shriram Chits in the districts where the raids were conducted.
