Karnataka's Sarada Scam! Imposter defrauds thousands in the name of 'Islamic Finance'; Investors lose thousands of crores in a scam that features Congress leaders
Siddaramaiah and Roshan Baig with IMA Chief
Despite being aware of the fraudulent activities of IMA, the state government and its agencies failed to see the entire scam which has now resulted in more than 3000 investors losing money and Mansoor Khan absconding along with his wives and children
Liberals and the likes of Owaisi have been batting for Islamic finance saying that since interest is 'haram' and only 'halal' investments would be made, the model is safe and sound. This claim has fallen like a pack of cards after IMA Jewels run by Islamic Monetary Advisory (IMA) group has defrauded thousands of investors to the tune of thousands of crores. While the magnitude of the scam is yet to be determined, names of several Congress leaders, local MLAs and corporators have emerged in the scam.
The IMA scam has resulted in investors mostly Muslims having lost their hard earned money to the nexus of businessmen and politicians. IMA group of companies was run by Mohammed Mansoor Khan with 6 directors viz Nasir Hussain, Naveed Ahmed Nattamkar, Nizammuddin Azeemuddin, Afshan Tabassum, Afsar Pasha and Arshad Khan. The IMA ran its business on the grounds that it is a co-operative and worked on the model of Islamic Banking and Shariah. Its USP was No interests, No Haram investments, risk sharing and financing based purely on real assets.
On Monday 10th June, as the news about the fraudulent acts of the company and disappearance of Mansoor Khan spread, hundreds of anxious investors gathered at the office of IMA Jewels in Shivajinagar in Bengaluru and demanded that Mansoor Khan and other directors turn up and assure them of returning their money. When no one turned up, the investors queued up at the Commercial Street police station to file complaints against IMA Jewels. As of today more than 3000 people have registered their complaints and claims run into thousands of crores of rupees. The police have informed the media that the investors include vendors, businessmen and many from the middle class too. IMA had promised high returns of up to 36% per annum.
The IMA group has 16 companies under its wings and the status of each of them is unknown. Its most public face was IMA Jewels through which the money was collected and routed to various enterprises. The company was already under the scanner with the Assistant Commissioner issuing a notice in November 2018 to forfeit all movable and immovable properties of the Bengaluru based IMA and its promoters and directors. IMA had been found guilty of illegally collecting money from public, diverting the funds to its directors and defaulting on repayments.
Even according to the Ministry of Corporate Affairs portal, IMA registered as IMAIP BULLION AND TRADING LLP, the company's returns were filed for FY 2015-16 last. There are no returns filled for subsequent years. The profit for year ending 2016 was negative at Rs -17,874 where as net cash inflow from investors was Rs 4,96,00,000. It is really surprising that IMA was paying its investors a return of 3% per month which roughly amounts to Rs 14,88,000 per month while it was under a loss!
Farooq, one of the investors who lost money told Organiser that IMA had promised a monthly returns of Rs. 3000 if he invests Rs. 1 lakh in the company. This continued for a few months and the returns reduced and subsequently stopped. But IMA continued to get new investors and this money was used to pay up earlier investors, says the victim. Farooq is a businessman in sanitary wares and had invested close to 4 lakh in IMA. Today his hard earned money is on the verge of being lost forever.
Did Cong-JD(S) government willfully go easy on IMA?
Despite being aware of the fraudulent activities of IMA, the state government and its agencies failed to see the entire scam which has now resulted in more than 3000 investors losing money and Mansoor Khan absconding along with his wives and children. The IMA Jewels stores in Bengaluru have been closed and its phone lines are dead.
After the notice was served to IMA last November, Mansoor Khan had written on Facebook claiming that "IMA legal team will take appropriate steps to set things right, which has been deliberately done to sabotage the image of IMA group." The police and administration went into a slumber after this and Mansoor was allowed to operate his business without any hindrances. IMA advertisements continued to appear in daily newspapers and TV channels. IMA had also sponsored many events of TV channels. A CEO of a Kannada TV channel was also reported to have received Rs. 10 crore and gold for not reporting the modus operandi of IMA. The CEO was arrested on bribery charges later. Consequently, most TV channels in Karnataka have covered the IMA scam as a cursory news and not elaborately.
Mansoor Khan and other directors of the company were flaunting their connections in the corridors of power to impress the investors. It is being said that Congress MLA Roshan Baig was a close friend of Mansoor Khan. An audio reportedly of Mansoor Khan has been doing rounds on social media where he claims that he might commit suicide as despite bribing bureaucrats and Muslims politicians, they have misinformed PMO and the RBI. He further says "The local MLA of Shivajinagar (Congress Leader Roshan Baig) has refused to return Rs 400 crore that I had given him. He started sending his goons to my office and home. So I have hidden my family in a village but I’m in South Bengaluru." Congress leaders from the area are silent over the scam as many are accused of being beneficiaries of Mansoor Khans largesse to them from time to time. State leaders too have been tight lipped and are only repeating the much hackneyed line that law will take its course.
There are many more examples of frauds operating under the guise of ‘Islamic Finance’ and hoodwinking gullible people to invest their money. While Indian Banking laws do not permit Islamic Banking, few states have allowed Islamic Banking in the co-operative sector. Frauds like Mansoor Khan are using this leeway to trap investors. Liberals have been supporting claims of few Muslim leaders to allow Islamic banking while they have been unable to detect and report people like Nowhera or Babu in their own communities.
Most of these companies also hide the identity of their promoters and religious principles. This is reflected in their names which do not portray it as being Islamic in nature so that investors from other communities too invest in them. Most people whom we spoke to did not know that ‘I’ in IMA stood for ‘Islamic’ as that was purposefully hidden by the promoters in all their adverts, websites and promotions. As things stand today, be it IMA Jewels or Attica, most of the customers are non-Muslims who do not know the antecedents of these fraudulent companies.