Nation Current Affairs 16 Nov 2018 Lure of Ponzi: A fat ...

Lure of Ponzi: A fatal attraction

Published Nov 16, 2018, 6:27 am IST
Updated Nov 16, 2018, 7:58 am IST
In most of these companies the minimum investment required is Rs 50,000 and many have deposited in crores.
Enforcement Directorate
 Enforcement Directorate

Bengaluru:The recent busting of Ambidant scam has brought into focus a large number of ponzi schemes in the city, where fly-by-night operators try to swindle the gullible by making them part with their hard-earned money by enrolling them in phony get-rich-quick schemes.

Ambidant Marketing Pvt Ltd, run by a father-son duo Syed Fareed Ahmed and Syed Afaq Ahmed, had itself  cheated more than 15,000 investors to the tune of `900 crore.


The modus operandi adopted by these operators is more or less the same. They lure investors by promising good returns and even offer them the same in the initial stages to gain their confidence.

Later the word gets around and more people join. But once the inflow of money ebbs they start skipping payments and later vanish, leaving thousands in the lurch

Other than Ambidant, there are many more such companies that had collected investors’ money and vanished. Companies such as Aala Ventures, Capitol, Morgenall, Burraq, Nafia, Injaz and many others have cheated investors and the total amount of money swindled is estimated to be more than Rs 500 crore.


In most of these companies the minimum investment required is Rs 50,000 and many have deposited in crores. Once a company goes bust, the small investors come forward to file police complaint, but those who had parked their unaccounted money lie low.

Expert said these companies wind up mainly because they rely solely on the money brought in by new investors, which they use to make payouts to old investors, whose investments need to be redeemed. Once the new investments taper off or stop, the company has no choice but to close down or issue false promises, as was done recently by Heera Gold, a Hyderabad-based firm with thousands of members. All ponzi schemes run till the inflow of money from new members is greater than the payouts for old ones. The moment this ratio changes, the scheme collapses.


ED investigation

Ambidant came under Enforcement Directorate lens in January this year after it allegedly invested huge sums in crypto-currency. Since then Ambidant stopped payouts to its customers and even not returned the invested amount, forcing many to lodge police complaints.

As of now, over 1,000 complaints have been lodged against Ambidant and Fareed and his son Afaq were arrested in this regard.

During the investigation, Fareed allegedly told police that mining baron and former BJP minister Gali Janardhana Reddy had offered to help him get off the ED’s hook, but demanded `20 crore. Following this revelation, the CCB had arrested Reddy.


Clerics used to woo investors

Interestingly both Ambidant and Heera Gold had roped in Muslim clerics to attract investors. These companies positioned themselves as those dealing only with Halal investment and made clerics speak in their favour. One of the investors with Ambidant who pledged her jewellery and invested Rs 1 lakh, claimed it was her sole savings. "I am a widow and have no son who can take care of me.

I had jewellery, which I pledged thinking I could get about Rs 10,000 a month. All that is now lost," she said. Ambidant initially paid as much as 50 percent to its investors. Later when more investors joined, it paid 25 percent, then it came down to 11 percent and the last payout was in January (9 percent). Those who had made huge investments were also  provided flats.


Location: India, Karnataka, Bengaluru