I Monetary Advisory: 7 directors held, grilled in the Bengaluru's ponzi scam
Seven directors of the city-based IMA Jewels were arrested and are being grilled by the Special Investigation Team to know their alleged role in the multi-crore ponzi scam operated by its owner Mohammed Mansoor Khan, police said on Thursday.
 
"On being warned against delaying the inevitable, the directors turned up at the city police commissioner's office and surrendered on Wednesday. They were arrested and produced in a local court for our custody to interrogate them as Khan is still at large," Deputy Commissioner of Police (central) Rahul Kumar told reporters.
 
The accused directors -- Anwar Pasha, Arshad Khan, Dada Peer, Naveed Ahmed, Nazir Hussain, Nizamuddin and Waseem -- were remanded in 10-day police custody to unearth the scam, which swindled the hard-earned savings of thousands of investors from across the state.
 
"As the case is being investigated by the SIT, its head B.R. Ravikanth Gowda is interrogating the accused on what went wrong leading to the IMA (I Monetary Advisory) go bust and Khan fleeing the country last week," said Kumar.
 
IMA's chartered account Iqbal Khan was also arrested on early Thursday after the directors disclosed his name and his alleged role in the scam that has rocked the state and the minority community as majority of investors and depositors in its ponzi schemes are lower and middle class Muslims.
 
Though the police launched a massive hunt for Khan, he is reported to have fled the country after Eid on June 5 along with his family, and huge quantity of gold ornaments, silver jewellery, diamonds and unspecified amount of cash from his posh showroom in the city's centre.
 
"We are on the lookout for Khan and will seek Interpol's help through the Union home ministry to extradite him to India after ascertaining in which country he is hiding," said Kumar.
 
The ponzi scam came to light on June 10 when the IMA showroom did not open for business after a week-long closure for Eid-ul-Fitr at the end of Ramzan last week and its Managing Director (Khan) reportedly fled to Dubai or Saudi Arabia to escape the wrath of his investors as their savings are lost.
 
The SIT team also raided IMA's head office and its main showroom and seized volumes of documents related to properties, assets, collaterals pledged by investors and depositors and bank accounts for investigation.
 
About 20,000 investors have filed a complaint with the local police station, enclosing a photocopy of documents, including passbooks showing their investments in the company.
 
The SIT has directed the banks to freeze the accounts of the company, Khan and his relatives to prevent any transaction.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
 
  • User

    COMMENTS

    Ranjith Kumar

    3 weeks ago

    So many investors were returned their PACL bonds and got an acknowledgement, but not money. In such situation, how to claim the refund. Please let us know.

    I Monetary Advisory: If Only SEBI Had Acted Upon Moneylife's Warning 3 Years Ago
    In continuation with our fight against all multi-level marketing (MLM) and Ponzi scams, Moneylife had sent emails to market regulator Securities and Exchange Board of India (SEBI) warning them about the Hyderabad-based Heera Gold and Bengaluru-based I Monetary Advisory Pvt Ltd (IMA). However, no action was taken by the market regulator. In fact, while referring the case to the CID- Economic Offences Wing (EOW), the Enforcement Directorate (ED) and the Commissioner of Police in Hyderabad, the market regulator claimed that the activities of Heera Gold were beyond the ambit of SEBI and the Reserve Bank of India (RBI).
      
    Both Heera Gold and I Monetary Advisory have now gone bust. The tragedy is that they have both targeted one particular community by taking advantage of their sales pitch that this is an investment blessed by their religious norms.
     
    In the past three years Moneylife has raised the issue of Ponzi operations of Heera Gold and IMA with two SEBI Chairmen—Mr UK Sinha as well as Mr Ajay Tyagi—because these firms operated like a vast collective investment scheme (CIS). Neither of the two SEBI chairmen bothered to respond. 
     
    In our communication on 22 February 2016, we had 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."
     
    This was followed by another mail on 3 April 2017.
     
     
    This is really sad, since people have sold their homes to invest in such schemes—especially Heera Gold and I Monetary Advisory. When there is a high powered coordination committee of regulators comprising RBI, SEBI, Insurance Regulatory and Development Authority of India (IRDAI), ministry of finance and others, it is a pity that these fraudsters manage to carry on with impunity.
     
    Both the controversial and shady groups have specifically targeted the Muslim community with a promise of high returns and constant references to ‘Allah’ to project themselves as a devout and god-fearing organisations. In addition, both these Ponzi schemes have support from state level politicians. 
     
    Heera Group has deep ties with politicians from Andhra Pradesh, which may have allowed it to flourish and expand investor network across the country. In December 2017, its central office at Hyderabad was inaugurated by Mohammed Mahmood Ali, the then deputy chief minister of Telangana. 
     
    In 2017, Dr Aalima Nowhera 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 have triggered panic among people who want their money back.
     
    IMA too had its share of political support. An audio-clip, claimed to be from Mohammed Mansoor Khan, managing director and chief executive (MD&CEO) of IMA, alleged that senior Congress leader and Shivajinagar's member of legislative assembly (MLA) R Roshan Baig had refused to return to IMA the Rs400 crore he had borrowed. However, the same Mr Baig was present at almost every big function or event organised by IMA in Bengaluru.
     
     
    Congress legislator Mr Baig, who represents the Shivajinagar Assembly segment in which the IMA Jewels office and showroom are located, however, denied asking Mr Khan to pay up Rs400 crore.
     
     
    (Photo: Roshan Baig, MLA, Shivajinagar with Mansoon Ahmed Khan of IMA)
     
    Following continuous protests by investors, there is at least some action in the case of Heera Gold. However, in the case of I Monetary Advisory, the protests are taking place since Monday only. 
     
    After reports that Mansoor Ahmed Khan of IMA had fled to Dubai or Saudi Arabia along with his family to escape the investors' wrath as their savings were held up by his firm, investors found that the posh showroom of IMA Jewels in the city centre did not open after a week-long closure for Eid-ul-Fitr at the end of Ramzan last week.
     
     
    After a meeting with top police officials on the IMA scam, Karnataka home minister MB Patil told reporters that a special investigation team (SIT) is being set up to inquire into complaints by hundreds of investors that IMA Jewels has stopped returning their deposit money and paying hefty interest on them.
     
    In July 2018, Moneylife had reported about the panic among investors of Heera Gold over payment delays and rumours about the financial difficulties faced by the group, which has amassed vast sums of money from the Muslim community. Heera Group claimed to be a gold trading company with business all over the world. In the past five years, the lack of any enforcement action by investigation agencies has allowed it to grow rapidly and diversify into diverse businesses. 
     
    Earlier in July 2018, while replying to an email sent by Moneylife with videos of panicky investors from Heera Gold, the market regulator’s Hyderabad office wrote to say, "Upon examination of the matter, it was found that the activities of Heera Group are in the nature of a 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, and Commissioner of Police-Hyderabad."
     
    “As the matter is presently being handled by Central Crime Station-Hyderabad, SFIO-Telangana, and Enforcement Directorate-Hyderabad,” the regulator has forwarded the videos sent  by Moneylife to its Mumbai office to these respective agencies. SEBI has also 'marked a copy' to the Reserve Bank of India (RBI), which is the nodal office for the state-level coordination committee. 
     
    Last year in October, Hyderabad police had arrested Dr Shaik, chairman of the controversial Heera Islamic Business Group, better known as Heera Gold. As per the 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 the public, where these companies commit a return of around 36% per annum for the invested amount. While the exact number of investors and depositors is not known because the companies have not disclosed complete information to the police, it is estimated that the number of depositors could be in thousands in different states of the country," the release says.
     
    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.
     
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    COMMENTS

    G Ravishankar

    2 months ago

    It is disheartening that despite flagging to the authorities no action was taken. But Moneylife direct outreach through Investor Awareness programs is the long term answer. Our babus hanging to the coat-tails of their political bosses have no time to do anything else worthwhile...

    B. KRISHNAN

    2 months ago

    This scam has its root in the greed and gullibility of the investors. This is not the first case where fraudsters have conned greedy public with high returns and scooted with the loot, nor will it be the last such case! The only way such frauds can be prevented is by educating the public. RBI and other money watchdogs can issue periodic ads in vernacular media warning people to beware of fraud when unsustainable interest is promised.

    P S SHANKAR

    2 months ago

    Keep up the vigilance and honesty ML team. You are the best.

    Ramesh Poapt

    2 months ago

    Great ML!

    I Monetary Advisory Founder Goes Missing After Raising over Rs2,000 crore: Reports
    Bengaluru-based I Monetary Advisory Pvt Ltd (IMA), which was trying to ride on the success of Nowhera Shaik of Heera Gold, is now snowballing into a similar downfall. 
     
    According to desperate social media posts from investors and reports, Mohammed Mansoor Khan, managing director and chief executive (MD&CEO) of IMA, may be absconding after posting an audio-clip of committing suicide, claiming that he was 'tired of bribing corrupt politicians and bureaucrats'. 
     
    IMA, an Islamic banking and halal investment firm, has allegedly and illegally raised over Rs2,000 crore, mainly from Muslim investors with promised returns of 14% to 18% per month. It was also found guilty of diverting the funds raised from the public to its directors and defaulting on repayments.
     
    In November 2018, Moneylife wrote about a notice in the Times of India that all movable and immovable properties of Bengaluru-based I Monetary Advisory and its promoters and directors would be forfeited because the firm was found guilty of illegally collecting money from public, diverting the funds to its directors and defaulting on repayments. (Read: Karnataka to forfeit assets of I Monetary Advisory-IMA that runs money deposit schemes
     
    Investors ought to have been alerted right then. But the promoter managed to fool people into believing that his legal team had swung into action and would set things right. But comments to our articles show that not everyone was fooled by the counter propaganda and alert investors were aware that balance sheets had not been filed for several years. 
     
    Things came to a head on Monday, 10th June, when hundreds of IMA investors gathered outside the company office in Shivajinagar at Bengaluru.
     
    Meanwhile, the Karnataka government has ordered an inquiry into the alleged misuse of investors' deposits worth crores of rupees by IMA Jewels.

    "A special investigation team (SIT) is being set up to inquire into complaints by hundreds of investors that IMA Jewels has stopped returning their deposits and paying hefty interest on them," state home minister MB Patil told reporters after a meeting with top police officials.
     
    News agency ANI has been tweeting updates including action by the Karnataka government. One investor told ANI, “I invested Rs25 lakh last year and for nine months, I got returns but when elections started, they said inflow of money has been affected and requested us to wait for two months. Two days back we got a message from the owner saying he is committing suicide.”
     
     
    According to a report from the New Indian Express , before fleeing, Mr Khan posted an audio clip saying he would have committed suicide by the time people listen to the recording. The clip went viral, spreading panic among investors. The newspaper claims that it learnt that Mr Khan fled to the United Arab Emirates (UAE) on the evening of 8 June 2019. 
     
    Bengaluru police are investigating the audio clip that was also sent to the city police commissioner's mobile number from an unknown location to verify its voice and content as the person threatened to end his life if he was not saved from blackmail by the local legislator.
     
    Mansoor Khan, MD&CEO, IMA
     
    Quoting a senior police officer who did not want to be named, the report says, "He (Khan) fled to UAE on Saturday evening. There were many people enquiring about his earlier complaints and coming forward to register complaints. Getting a hint of this, Mansoor Khan managed to flee."
     
    In a report, the Times of India says, "the audio clip, reportedly addressed to the city police commissioner, Khan alleged senior Congress leader and Shivajinagar's member of legislative assembly (MLA) R Roshan Baig had refused to return the Rs400 crore he had taken and that there was a threat to his life. The police are yet to ascertain if Mr Khan has indeed ended his life and have intensified their search for the founder-owner and his family members." 
     
    "A first information report (FIR) has been registered against Khan and the investment firm's four directors on complaints by about 7,500 investors against them under sections 406 and 420 of the Indian Penal Code (IPC)," a senior police official told IANS.
     
     
    One Farhan Rasheed, who calls himself as an Indian Muslim Blogger, says the investors of IMA have been demanding refunds since past several months. In May this year too, a few investors had visited IMA's office and were told that they would receive their money. "First, it was 1st May, then it was 10th May, which was extended to 15th and then to 25 May 2019 (for repayments). If you deeply analyze the symptoms of IMA Gold today, Comparing Heera Gold, Injaz International, Ajmera, Aala Ventures, Ambidant Marketing, Muzariba, and Baraka...all companies had similar symptoms when they shut down. Don't you all still realise that IMA Gold is another Ponzi Company?" he says in his blog
     
     
    Last year in November, the Karnataka government issued a notice to forfeit all movable and immovable properties of IMA and its promoters and directors. IMA has been found guilty of illegally collecting money from public, diverting the funds to its directors and defaulting on repayments. The notice issued by assistant commissioner has names of 16 entities, including IMA directors Nasir Hussain, Naveed Ahmed Nattamkar, Nizammuddin Azeemuddin, Afshan Tabassum, Afsar Pasha and Arshad Khan. 
     
    "Since it has come to the notice of the government that IMA and its associates have committed an offence by illegally collecting the money from the public and diverting the said funds to its directors' self-interest, thereby committed default in repayment of the depositors’ money. In this regard, several cases have been registered. As such, the government, exercising its power under Section 5 of the Karnataka Protection of Interest of Depositors in Financial Establishment Act, 2004, has appointed assistant commissioner, Bengaluru, north-sub division as the competent authority to forfeit movable and immovable properties of IMA and its associates, promoters, partners, directors, managers of members of any other person of the company," read the notice issued in local newspaper.
     
    Launched in 2006, IMA claims to have presence in bullion trading, educational academies offering pre-primary to higher secondary education, credit co-operative and housing society, health care services and a multispecialty hospital, hypermarkets and supermarkets, infrastructure and real estate development, printing and publishing and retail sales of gold, silver, diamond & platinum jewellery. 
     
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    COMMENTS

    nadeem

    2 months ago

    Of course SEBI never acts even when warned... Thanks Moneylife!
    Cheating gullible Muslims in the name of Shariah/Halal Investments...!

    samuel davis

    2 months ago

    pl think of some way to hold SEBI officials accountable ! You have our support !

    ksrao

    2 months ago

    Poor depositors (rich some time ago and also greedy). The Asst Commissioner, Bengaluru will please confiscate the properties of IMA, not forfeit his own.

    VASANT KULKARNI

    2 months ago

    WHERE THERE ARE FOOLS THERE IS MONEY, BUT NOT FOR THEM.

    Suketu Shah

    2 months ago

    how can such scams which are 100% fraud be successful without support of government and bureaucrats and ministers?No ache din since last 5 yrs.The more things change the more they remain the same.

    REPLY

    Shankeran MV

    In Reply to Suketu Shah 2 months ago

    No Acche din for Greed any day!!!

    ASHWIN AMRITLAL MEHTA

    2 months ago

    The cheaters will never go hungry when there are greedy people around. The people who have invested their money with such Entity/ Person, are also equally liable. These people are not financially poor, but knowledge wise poor. Government need not waste their time and energy to protect such people. They must have a bare minimum knowledge, that no business in the world can give 14 to 15% returns per month.

    balakrishnan

    2 months ago

    this happens, if private people become big players, so Nehru used Mixed economy concepts, he understood Indians if given an opportunity, would try to build his own assets that has happened you saw in Nirav Modi..who practically looted PNB but this man looted poor muslims.. Yet present PM Modi would want private actors and so he tries to make every thing possible to develop private businesses, naturally more and more such would unveil, you will see soon how many more.. in fact Yedddiyurappa promoted these men as a BJP man, earlier problems stated when in 1991 india was to open up for IMF loan , IMF obviously wanted opened markets.. result we continue to see today.. But PVN wanted to go back to mixed economy but indians bad luck made Kesari a man of jealousy affected PVN to get second term that is the beginning of fall; yea it will continue..

    REPLY

    Ajeya S

    In Reply to balakrishnan 2 months ago

    Hello Mr. BalaKrishanan in which century you live, whatever the wealth this country has created, it has happened in last 30 years, particularly after 1991 summer budget when ManMohan Singh opened the Indian economy and private sector flourished. Every year Indian Government spend around 1 lac crore just to keep PSUs running. Capital deployment in this country has gone to dogs (please see wonderful advice given by editor of money life on this recently to new government). Whatever the value we are creating thins country is now happening in private sector, why don't see success stories of Infosys, RIL, ITC,L&T etc and more recent unicorns like Flipkart, OYO, Swiggy and all. Please do some searching before writing . . .

    Anil Kumar

    2 months ago

    Yet one more. I think before it becomes such a big bubble, many of us come across them.

    Moneylife should take the initiative to maintain a list where people can report these suspect Ponzi schemes in the bud itself (Ideally RBI / SEBI should be doing this job, but knowing them, it probably won't be updated / dynamic enough.)

    I have prepared a tentative Excel format - link here - https://app.box.com/s/goomwk6enh4g4bf36ivd8bjjtfebnq68 - something similar can be made by Moneylife.

    As it is Moneylife has a whistle blower initiative, this list can be another industry benchmarking initiative.

    On a related note, came across a similar list maintained by Australian Securities and Investment Commission - https://www.moneysmart.gov.au/scams/companies-you-should-not-deal-with

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