IMA Scam: Thousands Duped Of Over ₹500 Cr In Karnataka; 6 Directors Surrender, Managing Dir Still Missing

The Logical Indian Crew Karnataka

June 13th, 2019 / 6:21 PM

IMA Jewellery Scam

Image Credit: News X , Times Of India

After an intense protest against the I Monetary Advisory (IMA), on June 11, six directors of the company surrendered to the Bengaluru Police.

Nasir Hussain, Naveed Ahmed Nattamkar, Nizammuddin Azeemuddin, Afshan Tabassum, Afsar Pasha and Arshad Khan were among those who surrendered. However, Mansoor Khan the Managing Director of the company is absconding.

Thousands of people from all strata of society have allegedly been stripped of their hard earned money by this firm.



What Happened?

These people gathered outside the office IMA against the possible scamming. The police rushed to the spot to control the increasingly tensed crowd. Many of them belong to a poor socio-economic background and have their life savings on the line.

The protest kicked off after an audio clip went viral on social media on Monday. The audio clip is allegedly from the investment firm’s founder/owner Mohammed Mansoor Khan and addresses the Commissioner of Police. Khan, in the audio clip, claims that the company has suffered a big financial setback and that he would be dead by the time the audio is made public.

Bengaluru Police had set up several kiosks in a small convention hall in Shivaji Nagar on June 10. More than 2000 people gathered in the hall to register complaints against the IMA Group of Companies.

A second audio clip surfaced on Tuesday evening, allegedly from Khan again. This time he claimed that he would return the investors’ money by the 15th; although he does not mention the month.

The CM of Karnataka then ordered an inquiry in the matter. The case was then over to the Central Crime Branch (CCB) for investigation.

The alleged Multi-crore scam is now being treated as a Ponzi scheme. The estimated fraud, at present, stands at more than ₹500 crores.


The Fraud

IMA has allegedly collected investments to the tune of ₹2000 Crores till date. Based upon more than 3000 complaints that the police registered, the fraud is estimated to be more than ₹500 Crores.

Reportedly, six Directors of IMA surrendered to Bengaluru Police on Tuesday, but their statements have not been made public yet. The whereabouts of Mansoor Khan still remains unknown. The police have filed FIRs against Khan and are still registering complaints against IMA.

Karnataka’s Chief Minister, H.D. Kumaraswamy handed over the probe to a Special Investigation Team (SIT). The team has been formed and comprises of 11 members, chosen from various departments, including the CID, Intelligence, and Lokayukta. Deputy Inspector General (DIG) Ravikanthe Gowda will lead the probe.

In the first audio clip, Khan alleged that the Congress MLA of Shivajinagar [Roshan Baig] took ₹400 crores for elections. But, after he was unable to secure a Lok Sabha seat, he refused to return it.

“Instead of returning the money, he started sending his men to my office and residence. I and my family faced danger to our lives… The only intention behind recording this audio is that I have Rs 500 crore worth of properties in Bengaluru, 30,000-carat diamonds as well as gold. Please take all of this into your custody and pay my investors. But beware of the frauds and pay only genuine investors,” Khan reportedly said in the clip.

In a series of tweets, Roshan Baig has denied any involvement in the scam. He has called it an attempt to assassinate his character and assured that he is going to meet everyone affected within his constituency.


Role Of IMA

According to their website, the IMA was founded as an investment firm, in 2006, by Mohammed Mansoor Khan. Within a decade its presence spread across various industries. It now has a presence in more than 10 sectors across 14 different entities. The investment branch carries out the main operations of IMA.

Reportedly, the investors were offered high return rates of 14-18% against their money. They claim that the interests received for a few years, in the beginning, were indeed as high as 17%. But, it dropped to almost 1%-3% for the next few years. The investors say they did not receive any dividend in the past few months.


A Ponzi Scheme?

From the nature of the fraud, it is being speculated to be a ‘Ponzi scheme’.

According to the website of U.S. Securities and Exchange Commission (US-SEC), “A Ponzi Scheme is an investment fraud that pays existing investors with funds collected from new investors. Ponzi scheme organizers often promise to invest your money and generate high returns with little or no risk. But in many Ponzi schemes, the fraudsters do not invest the money. Instead, they use it to pay those who invested earlier and may keep some for themselves.”


IMA Scam: Thousands Duped Of Their Hard-Earned Money
Source: Wikimedia Commons

This seems to be the case with IMA.

The company trajectory follows the path similar to that of a Ponzi Scheme, with gradually decreasing returns and eventual ‘collapse’. It is also not clear how the company handles its investors’ money and how it decides the returns. US-SEC considers these and the many more characteristics that the IMA scam exhibits as “Red Flags” for a Ponzi Scheme. However, there is no official confirmation that the IMA investment plan is a Ponzi scheme.


The Logical Indian Take

In light of the current development, it is still early to comment on what’s in store for all the stakeholders. Regardless, the scam stands as evidence that caution must be exercised when it comes to investing one’s money.

All those who invested their hard earned money in IMA are facing excessive difficulties right now. Many are on the verge of losing their life savings. 

The Logical Indian urge our readers to be careful and always read the finer details of a scheme before investing. For the readers’ benefit, here are the links to a few trustworthy resources which can act as a guide to making wise investment decisions.

What to do to avoid investment fraud

Different types if investment frauds

Ponzi Scheme


Also Read: 20 Years On, 5.6 Crore Investors Wait For Rs 49,100 Crore Refund In PACL Chit Fund Scam


Contributors

Written by : Samarth Kashyap (Intern)

Edited by : Shweta Kothari

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