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

    6 months ago

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

    samuel davis

    6 months ago

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

    ksrao

    6 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

    6 months ago

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

    Suketu Shah

    6 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 6 months ago

    No Acche din for Greed any day!!!

    ASHWIN AMRITLAL MEHTA

    6 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

    6 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 6 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

    6 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

    MLM Truth: LuLaRoe Distributors in Bankruptcy as Founder Touts Financial Freedom
    At least 115 current or former LuLaRoe distributors have filed for personal bankruptcy since 2016.
     
    Marlie Ezarik was 10 weeks pregnant when she was asked by the founders of the MLM clothing company LuLaRoe for her “why,” which in the MLM world means a distributor’s reason for joining a company. The question came while Ezarik was on stage at a LuLaRoe convention in Austin, Texas, in March 2017. Ezarik, who had enlisted as a distributor the previous summer, didn’t hesitate to answer.
     
    “I’m about to have a baby,” she said.
     
    Two months later, Ezarik was more than $15,000 in debt as a result of her LuLaRoe business.
     
    It was a combination of things: difficulty selling the clothing and recruiting others to join the business, coupled with potential market saturation; a product line that Ezarik described as largely unsellable; and purchasing loads of inventory at LuLaRoe’s recommendation.
     
    Fearing that she would not be able to afford daycare, diapers and baby wipes for her yet-to-be-born child, which would be her first, Ezarik called it quits and filed for Chapter 7 bankruptcy in May 2017, not quite a year after she launched her LuLaRoe business.
     
    Ezarik is not alone.
     
    Despite LuLaRoe’s stated mission to “improve lives and strengthen families … through fashion,” a TINA.org investigation has found that at least 115 current or former LuLaRoe distributors have filed for personal bankruptcy since 2016, with more than half of those filings occurring in 2018. In fact, LuLaRoe distributors are more likely to end up bankrupt than to reach the highest tier in the company’s distributor ranks. In Ezarik’s case, she never made more than a couple hundred dollars with LuLaRoe, despite sometimes working 30 hours a week on top of a full-time high school teaching job.
     
     
    California-based LuLaRoe enjoyed a meteoric rise after its founding in 2013. Aimed at moms and millennials like Ezarik, who is 32, the company markets itself as an economic empowerment opportunity with flexible hours that can bring in thousands of dollars in income each month. In order to attain financial freedom, distributors are required to make both a substantial initial investment ($5,000 to $11,000; Ezarik paid $5,000 for an “initial order kit” containing 284 pieces) followed by monthly purchases of clothing in order to stay qualified for all bonuses and compensation. Unfortunately, for most distributors the cost of the LuLaRoe business far outweighs its benefits. And for at least 115 distributors, the financial strain of a LuLaRoe business was a factor in filing for personal bankruptcy.
     
     
    While these distributors face financial ruin, current LuLaRoe marketing materials make a multitude of false and deceptive income claims, including the misleading assertion that by joining LuLaRoe, financial freedom is attainable:
     
     
    LuLaRoe Founder DeAnne Stidham similarly touts the ability to achieve your “family’s financial freedom” in this video taken on her phone.
     
    In stark contrast to LuLaRoe’s proclamations of happiness and wealth, a review of the company’s only published income disclosure statement shows that the average annual bonus paid to a LuLaRoe distributor at all ranks was just $92 (the median annual bonus was $86). Ninety-eight percent of distributors don’t even earn enough money from bonuses to recoup their initial investments. As such, it’s no surprise that many LuLaRoe distributors are financially distressed.
     
    LuLaRoe distributors have filed for bankruptcy in 35 states (see map below), with 89 filing for Chapter 7 and 26 filing for Chapter 13. The states with the largest number of bankruptcy filings are California (18), followed by Washington state (9), Oregon (8) and Virginia (6). Colorado, Indiana, Iowa, New York, and Texas each have five bankruptcy filings…. Continue Reading
     
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    User

    COMMENTS

    Ajeya S

    7 months ago

    This is the first time I am reading about LulaRoe. These things bound to fail, however in India Qnet is going strong, I know 3 people who have lost lacs (5 lac, and 9 lac). Also one guy lost good high paying job, as he was doing Qnet all the time. Why these things still run in India ?

    REPLY

    Chetan Kadam

    In Reply to Ajeya S 7 months ago

    Sab paise ka chkkar hain babu bhaiyya

    Cryptocurrencies are Ponzi schemes and should be banned: MCA Official
    Terming cryptocurrencies as ponzi schemes, Anurag Agarwal, Joint Secretary in the Ministry of Corporate Affairs, on Friday said such virtual currencies should be banned.
     
    He said official indecision so far on the virtual currency has harmed the investors.
     
    "When it comes to investor protection, as IEPF (Investor Education and Protection Fund) authority, we have to take a stand against the ponzi schemes. We are taking a stand and we think cryptocurrency is a ponzi scheme and it should be banned," said Agarwal, who is also the CEO of IEPF.
     
    "This is the view of the IEPF authority and we want the government to take a stand on it. By not taking a decision, we are harming the investors. We have to move very swiftly. This is the view of IEPF authority," he added.
     
    Although both the government and the Reserve Bank of India (RBI) have warned against the use of the virtual currency time and again, both RBI and the Centre are yet to come up with definite guidelines on the same.
     
    IEPF is a body under the Corporate Affairs Ministry set up with an aim to facilitate refund of shares, unclaimed dividends and matured debentures to investors and promote awareness among them.
     
    The government had last year also formed a panel headed by Finance Secretary Subhash Chandra Garg to finalise a report on draft regulations on cryptocurrencies, but the report is yet to be finalised and made public.
     
    In 2017, the finance ministry said that virtual currencies are neither currencies nor coins and are not authorised by the RBI and the government as a medium of exchange and they do not have any regulatory permission or protection in India. The Finance Ministry had warned of ponzi scheme like risks in cryptocurrencies.
     
    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.

     

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    COMMENTS

    Arun Deshpande

    4 months ago

    PACL

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