The Hindu : National : Congress joins issue with Editors' Guild

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Thursday, Feb 22, 2007
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National

National

Congress joins issue with Editors' Guild

Special Correspondent

Says Margadarsi Financiers has been surviving by recycling deposits

HYDERABAD: The Congress Legislature Party (CLP) has joined issue with the Editors' Guild on its statement on the Margadarsi Financiers issue.

In a press release issued here on Wednesday, the CLP said:

"Surprised"

"We are surprised and shocked at the stand taken by the Editors' Guild that taking action by Government of Andhra Pradesh against Margadarsi Financiers, an unincorporated body carrying on the illegal business of acceptance of deposits from the public in complete violation of the provisions of the RBI Act, is tantamount to suppression of press freedom.

"We do not understand as to how the responsible persons from the Press can interpret that taking action against somebody who is carrying on an illegal activity for over a decade and has placed in the process Rs. 2,600 crore belonging to about 2.75 lakh middle class depositors in jeopardy, is infringement of press freedom guaranteed under the Constitution.

"Illegal activity"

"The whole issue of Margadarsi Financiers carrying on illegal activity of acceptance of huge deposits from the public had come to light when Mr. Aruna Kumar Vundavalli, MP, lodged a complaint on 6.11.2006 with the Union Finance Minister about the gross illegal business carried on by Margadarsi Financiers."

Tracing the sequence of events that have unfolded over the past three months, the CLP release said:

"It is very clear from their own financial statements that Margadarsi has been surviving by recycling the deposits. They have been able to honour their commitments so far because they were raising new deposits to repay the old deposits. Now that RBI has directed them to stop raising fresh deposits, they are bound to fail on their repayments. As per the A.P. Protection of Depositors Act, the State Government has a responsibility to protect the interests of the depositors raised by unincorporated bodies. All that the State Government is doing now is to approach the Court for permission to search the premises of Margadarsi as they have been refusing to cooperate and part with information. It is not an executive action but it is only action with a legal sanction."

The release was signed by S. Udhaya Bhanu and D. Sridhar Babu, Whips, S. Gangaram, Secretary CLP, and J. Rathanakar Rao, N. Varadarajulu Reddy and N. Divakar Rao, MLAs.

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