Date:22/12/2006 URL: http://www.thehindu.com/2006/12/22/stories/2006122204760600.htm

Andhra Pradesh

A.P. seeks report on Margadarsi Financiers

Special Correspondent

Advisor(Finance) N. Rangachari appointed to look into all records

HYDERABAD: Invoking its powers under the Andhra Pradesh Protection of Depositors of Financial Establishments Act, 1999, the State Government has appointed its Advisor (Finance) N. Rangachari to examine all records of M/s Margadarsi Financiers "with a view to protecting the interests of the depositors."

Simultaneously, it has authorised Inspector-General of Police, Criminal Investigation Department, Krishna Raju "to file application in courts of jurisdiction and take other action under the provisions of the Reserve Bank of India Act, 1934". The Authorized Officer, as he has been termed, has, in particular, been empowered to take action under sections 45 (T) and 58 (E) of the RBI Act.

Government concern

Mr. Rangachari, who is a former Chairman of the Insurance Regulatory & Development Authority (IRDA), has been mandated to submit a report as to whether Margadarsi has raised deposits from the public in violation of the RBI Act or under provisions of the AP Act and also whether it has acted in a manner prejudicial to the depositors' interests.

Two separate Government Orders (GOMSs 800 & 801) issued on December 19 were released to the press on Thursday.

Margadarsi Financiers, owned by media baron Ch. Ramoji Rao, has been in focus for the past six weeks following a complaint to the Union Finance Ministry by Congress MP V. Arun Kumar, alleging violation of the RBI Act in collecting deposits from the public.