BENGLAURU: The IMA multicrore scam, the biggest the state has seen so far, has so far ruined the lives of nearly 40,000 investors, who had put in their hard-earned money, hoping to get good returns.
IMA CMD Mohammad Mansoor Khan shrewdly identified the loopholes in the prevailing laws and exploited gullible investors, most of them Muslims, into a ponzi scheme, by projecting it as a Halal investment.
He took advantage of loopholes in the Karnataka Protection of Interest of Depositors in Financial Institutions (KPID) Act, 2004. Following a notice under KPID, Mansoor had claimed that IMA group collected contributions through a Limited Liability Partnership (LLP). His close proximity to political and religious leaders dissuaded the officers from going after him.
In fact the Economic Offences Wing of CID gave a report opining that sections of KPID Act, 2004, cannot be applied to IMA Group.
Using this leeway, the IMA took investors for a ride by stating that they are ‘partners’ in the LLP firm. Islamic banking expert Saif Mohammad dismissed this as a bogus argument. If investors are partners where is the partnership deed you need to update your partners. The agreement should be renewed by filing it with the ministry of corporate affairs. The partners should be updated with the registrars of companies, he explained.
There are already 40,000 complaints against the company. Does it mean the company has accepted these 40,000 investors are their partners? Definitely not, only 180 or 190 were registered as partners. And this was not investigated properly which gave him a free hand, Saif said.
At least Securities and Exchange Board of India (SEBI) should have regulated and taken action. They also failed, he lamented.
About two years ago, the IMA was registered as co-operative society. This was done to fool the people, Saif pointed out.
The multi-crore IMA ponzi scam kingpin Mansoor Khan has siphoned off crores of rupees by cheating them and has fled the country. Through his street smartness he has taken thousands of investors for a royal ride while officials have been hoodwinked through the loopholes in the law.
Apart from misusing KPID Act, he also exploited Sharia laws to woo Muslim clients. Charging or accepting interest for their money is forbidden in Islam. To circumvent this, Mansoor offered high-value interest, ranging from 3 to 10 per cent per month.
He painted it a halal colour through his religious and pious attire and his acquaintance with the respectable or who’s who of the society.
Saif said halal is not just limited to cooking, eating or slaughtering. Actually, Halal is referred to in the business too, meaning it is in compliance with the Shariat laws, which is by and large supreme for Muslims.
In order to gain respectability in the community, he extensively offered donations to charitable activities and mosques. This also helped him gain the confidence of his community, which he exploited to his advantage, Saif explained.
In addition, Mansoor also started multiple businesses such as pharma, hospital, real estate and other activities to attract more people and to diversify his scam, he added.
Mansoor advertised heavily through Urdu media and he also attracted educated people. Probably, when the pressure became unbearable, he decided to flee, Saif said.
KPID Act has provision to attach his properties to provide relief to the investors who have been duped by him. The IMA should be brought under its radar. The government must act swiftly to provide relief to thousands of people, he opined....