Dr Aalima Nowhera Shaik, chairman of the controversial Heera Islamic Business Group, better known as Heera Gold, has been arrested by Hyderabad Police. Hyderabad Police Commissioner Anjani Kumar told media persons about the arrest of Dr Shaik, who is accused of collecting money as deposits from thousands of Muslim people from several states. Police also conducted searched her residence in the city, the Commissioner says.
In a statement Hyderabad Police said, "Central Crime Station (CCS) has taken up investigation, recorded statements of various stakeholders and other victims and collected evidences from different sources and found substantial incriminating evidences against Ms Shaik. Based on available evidences, Ms Shaik was arrested on 15th October at New Delhi and brought to Hyderabad on transit remand."
As per information available, the Police said, Ms Shaik is heading 15 companies under different names under Heera Group of companies. "Many of the companies are involved in collection of deposits and investment in different modes of gold scheme from public, where there companies commit a return of around 36% per annum for the invested amount. While exact number of investors, depositors is not known because the companies have not disclosed complete information before the Police. It is estimated that the number of depositors could be in thousands in different states of the country," the release says.
Hyderabad Police has identified more than 160 bank accounts of Heera group from across India and are seeking more details from the banks. The Police says, "Different properties have been identified and necessary action under the Telangana Deposits of Financial Establishment Act, 1999 and the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, are under consideration."
Last month, over a 100 victims of Heera Gold held public protests in Hyderabad along with victims and investors from other parts of India.
The protests were led by Shahbaz Ahmed Khan, who had told Moneylife that over 200 investor victims have filed complaint against Heera Gold and its founder Dr Aalima Shaikh Nowhera (Nowhera Shaik). “Every day, I am receiving calls from panicky victims of Heera Gold from across the country seeking my help in recovering their investment. There are many who had invested more than Rs1 crore in Heera Gold and are now facing difficulties. They are neither receiving interest nor getting the principal amount back,” Mr Khan had said.
Replying to an email sent by Moneylife with videos of panicky investors, the market regulator’s Hyderabad office wrote to say, "Upon examination into the matter, it was found that the activities of Heera Group are in the nature of Ponzi Scheme. Further, the nature of activities of Heera Group was also discussed in the meetings of State Level Co-ordination Committees (SLCC) of Andhra Pradesh and Telangana, which are headed by Chief Secretaries of the respective states. It was decided in the meetings of SLCC that the activities of Heera Group appear to be beyond the regulatory ambit of SEBI and RBI and the case would be taken up for investigation by relevant authorities such as CID-EOW, and Serious Frauds Office of India (SFIO). Accordingly, SEBI had already referred the case to CID-EOW, Enforcement Directorate, Commissioner of Police-Hyderabad."
On 10 September 2018, Farzanaunissa Mohammad Khaja filed an FIR under Section 406, 420 of Indian Penal Code (IPC) and section 5 of the Telangana Deposit of Financial Establishments Act, in Bajara Hills Police Station at Hyderabad. Ms Khaja has alleged in the FIR that her husband had invested Rs25 lakh in Heera Retail Hyderabad Pvt Ltd, but the company has refused to return her money.
Thousands of investors of Heera Gold are in a panic since past several months over payment delays and rumours about financial difficulties faced by the group, which has amassed vast sums of money by specifically targeting the Muslim community by invoking the name of “Allah” in its sales pitch.
The trigger for people gathering to protest at Heera Gold’s plush offices in Bengaluru, Hyderabad, Mumbai and other cities was the decision to 'share profit' once in three months instead of every month. But that is not the only issue.
In 2017, Dr Shaik, CEO of Heera Gold formed the All India Mahila Empowerment Party under the banner of justice for humanity. This party even contested 221 out of the 225 seats in the recently concluded Karnataka Assembly elections with a 'diamond’ as its symbol. It is rumoured to have lost large sums of money. This and other rumours has triggered panic among people who want their money back.
Heera Group claims to be a gold trading company with business all over the world. In the past four years, the lack of any enforcement action by investigation agencies has allowed it to grow rapidly and diversify into diverse business. In the past two years Moneylife has raised the issue of Heera Gold's Ponzi operations with two SEBI Chairman — Mr UK Sinha as well as Mr Ajay Tyagi — because it operated like a vast collective investment scheme. Neither of the two SEBI chairmen bothered to respond.
Our communication we said, "We hope SEBI will take note of this and hasten action so that people do not end up losing money. Many women too are being conned into borrowing against property to invest in these companies on the claim that the returns would be significantly higher than the interest they would pay on their loans."
Investigations and information by a premier government agency, perused by Moneylife, claim that Heera Gold is involved in hawala activities. The note lists various actions against the group. For instance, on 17 May 2014, the Hyderabad Police apprehended six accused, while Heera Group promoter, Dr Shaik was named an absconding accused. Subsequently, on 21 May 2014, the Enforcement Directorate (ED) searched Heera Group premises and seized documents pertaining to the illegal transfer of money through hawala.
In August 2012, Asaduddin Owaisi, member of parliament (MP) from Hyderabad, had registered a case against Dr Shaik for cheating a large number of local investors from his constituency. The Hyderabad Police are investigating this case as well.
The Heera Group began its operations in 2010 and since then, claims to have created 25 legal entities. Of these, only 10 were found to be registered on registrar of companies (ROC), Hyderabad and only four are found to have filed balance sheets (FY2012-13), which are being analysed. It is not registered under FCRA, says a government source.