Hyderabad, March 22: Two finance companies, Sai Vuma Chit Fund Company Private Limited and Vuma Maheswara Finvest Ltd, abruptly downed their shutters, leaving in the lurch depositors who had reportedly put in over Rs 60 crore.
Both the companies are owned by Kanduru Umamaheswara Rao, sonin- law of Jnanpeeth awardee and doyen of Telugu literature late Kavisamrat Vishwanatha Satyanarayana, and nearly 600 people from all walks of life deposited their hard-earned money in the companies.
According to the police, the management paid the interest for the month of January on the fixed deposits but failed to do so for the subsequent months. They also did not return the amounts on some deposits even after maturity.
On Saturday, the companies wound up business. Based on the complaints lodged severally by the depositors , Satya – narayanapuram Police registered cases under Section 420 (Cheating) of the IPC and under the provision of AP Protection of Depositors of Financial Establishments Act.
“The companies have collected amounts from several people and we are ascertaining the number of depositors and the amounts due to them. We have seized records from the offices and they are under scrutiny,’’ Vijayawada Police Commissioner KV Rajendranath Reddy told Express.
About 50 depositors met the commissioner today seeking action against the management and return of the money they had deposited.
“Some depositors have invested amounts ranging from Rs 2 lakh to Rs 30 lakh,’’ Rajendranath Reddy said.
Asked whether the intention of the management was to cheat the depositors or the denouement was the result of mismanagement, what with reports suggesting that Umamaheshwara Rao had invested in real estate and even the hotel business, the commissioner said that these aspects would come out in the course of investigation.
“The company has assets and we are gathering details about the properties owned by it. Once the investigation is through, the properties would be attached,’’ Reddy added.
It is learnt that Umamaheswara Rao was in police custody. He has reportedly told them that he had no money left with him to repay the depositors.
The police, however, have assured the people that they would get their money back once the probe was over.
Since Rao had been running the finance business for last 20 years in Vijayawada and organising cultural activities very frequently, he had earned a good reputation among the people who blindly parted with their hard-earned money, allured by the promise of fabulous returns. He is said to have forayed into the real estate and hotel business sometime ago with depositors’ funds and even started a resort, “Uma Holiday Inn and Theme Park” at Donabanda Centre on the Vijayawada-Hyderabad highway.
Meanwhile another depositor, a retired South Central Railway employee P Ramaswamy said that he had deposited Rs 6 lakh with the chit fund company since it had offered good returns. He had fixed his daughter’s marriage in August and the closure of the company had come as a rude shock to him.
DCP Vijay Kumar said that so far 150 depositors have lodged complaints with the Satyanarayapuram Police against Umamaheswara Rao.
–Agencies–