IMA Jewels: How the Halal scam duped Bangalore investors of 5000 crores

Since Monday 100’s and 1000’s of its investors have thronged its offices in fear of losing their investments after a WhatsApp audio of IMA’s Managing Director Mansoor Khan threatening to kill himself had gone viral. Fearing that they would lose their investments, a large number of women with their children started gathering at the IMA Jewels headquarters at Shivajinagar, demanding action against the managing director. Most of those who invested in the company belong to the minority community, working as autorickshaw drivers, beedi manufacturers, carpenters and street vendors. A lot of them lost their entire life savings in the IMA Jewel Scam.

The protest and outpour grew so big that the authorities finally had to step in. A senior police officer had said that as many as 8000 complaints were filled by investors and the number is expected to go up.

Taking note of this the Chief Minister of Karnataka HD Kumaraswamy formed an SIT to nab the culprits. 6 directors of the I Monetary Advisory have surrendered to the police in Bengaluru on 11th June. The Bangaluru police had arrested its directors including Mohammed Mansoor Khan’s relatives, who is the founder and the managing director of the Ponzi scheme. However, Mansoor Khan is still absconding.

Anyway, this does not begin and end with Mansoor Khan. The case gets even murkier as it has a political connection. In the audio which was also sent to the city police commissioner, Mansoor is heard saying that the Shivajinagar Congress MLA Roshan Baig had taken 400 cr from him to contest the 2019 Lok Sabha elections. In the audio clip, he also said that the PMO and RBI were misinformed about a lot of things.

MLA Roshan Baig has come out to clarify that he has no connection with the Bengaluru IMA jewels scam. Responding to these allegations, the Congress leader took to social media that he had no connection to the case as it was the work of political rivals. He said in a tweet, “After my recent political fallouts, some of my adversaries have made a full-fledged attempt at assassinating my character by orchestrating a series of events using underhanded methods. The entire hitjob has been carried out using a baseless, un-investigated audio recording.”

The issue now became so big that even the chief minister of Karnataka HD Kumaraswamy was also forced to react. CM Kumaraswamy had also directed Home Minister to take stock of the situation. Now, with the allegation against the Congress leader and a majority of the victims being Muslim, the Congress has also gone into a huddle with MLAs of the Muslim community holding meeting with the Home Minister. Well, the method used by Khan is nothing new. It has its roots in the practice of ‘halal’ investment, which targets investors from the Muslim community who believe that putting money in banks and earning interest is haraam. Which the scamsters ended up taking advantages of the victim’s religious beliefs. The IMA was reportedly offering 24 to 30% interest per annum on their investor’s savings calling it sort of the partnership business. The plan was to lure its customers to invest their entire life savings into this so-called halal Ponzi scheme.

After my recent political fallouts, some of my adversaries have made a full-fledged attempt at assassinating my character by orchestrating a series of events using underhanded methods. The entire hitjob has been carried out using a baseless, un-investigated audio recording. (1/n)

— Roshan Baig (@rroshanbaig) June 12, 2019

This case has emerged as a similar one to the ambident marketing scam which took place in Bangalore however, it came to light only in 2018 after the ED raid. The scam amounted to rupees 954 cr. Compared to it, the IMA Jewels scam is five times bigger than the previous one.

Ponzi scheme organisers promise huge payouts by reinvesting subscribers’ money. But in reality, the money is rarely reinvested, the people are usually exploited. For an amount of time, it works as it takes the form of a rolling scheme where the old investors are paid from the amounts credited by new investors. But when it gets hard to get new investors or when there is a large withdrawal of funds, the scheme collapses. This is a business where the organisers make enormous profits without any seed investment while on the other hand, the investors lose everything.

The Ponzi schemes are nothing new to our country. be it Saradha or Rose Valley. What is surprising is investors blinded by the promise of quick and unusually high returns.. invest the money without thinking there could be something wrong.