Date:21/01/2007 URL: http://www.thehindu.com/2007/01/21/stories/2007012114900300.htm

Andhra Pradesh - Vijayawada

Chit fund employees arrested

Staff Reporter

Foreman and collection agent charged with misappropriating Rs. 2.5 crores

VIJAYAWADA : The city police on Saturday arrested two employees of a private chit fund company on the charge of duping the firm to the tune of Rs. 2.5 crores, and produced them in the court. The accused were sent to the central prison in Rajahmundry for judicial remand.

Guntaka Srinivasa Reddy of Kanchikacherla and Avutu Venugopala Reddy of Gannavaram, foreman and collection agent, at Raj Yuvaraj Chit Funds Private Limited, were charged with cheating the company.

`Records tampered'

The police said that managing director of the company B. Yuvaraj Reddy, a resident of Hyderabad, used to issue blank cheques to Srinivasa Reddy to make payments to bidders. But Srinivasa Reddy "misused" the cheques and withdrew Rs. 2.3 crores from the bank. He sold the company's cars for Rs. 15 lakhs.

The police charged Venugopala Reddy with tampering the records and misusing Rs. 7.4 lakhs.

Following complaints from bidders that the cheques had bounded, Mr. Yuvaraj Reddy deputed a team of auditors and found that there was large scale "misappropriation of funds".