BENGALURU: The I Monetary Advisory (IMA) scam may be the first case in Karnataka and perhaps the country, which may attract the provisions of ‘Banning of Unregulated Deposit Schemes Ordinance, 2019’, sources on condition of anonymity told The New Indian Express.
“Prima facie, the IMA scam is a fit case to invoke the new Ordinance, which was promulgated in February as a punitive and deterrent measure against unregulated Ponzi schemes. The Ordinance is valid till August. It is likely to become an Act in the next Parliament session,” an official source said.
The Ordinance penalises unregulated deposit schemes, wilful default in regulated schemes and wrongful inducement of investors to unregulated deposit schemes. It provides for punishment ranging between one year and 10 years and fine ranging from Rs 2 lakh to Rs 50 crore and also provides for attachment of properties or assets for repayment to depositors.
According to sources, the Reserve Bank of India in 2014 and 2015 had “flagged down IMA while raising a series of questions on the unregulated framework under which the Halal investment company was assuring high and unrealistic returns on bullion and monetary deposits. But the police allegedly chose to look the other way. After the RBI’s objection they should have examined the IMA documents and questioned the company founder and management,” an official source said.
“The police claims there were no complaints registered against the IMA until June 9, when an investor - Mohammed Mansoor Khan - filed a complaint at the Commercial Street police station stating that he had lost Rs 4.84 crore. However, there were individual complaints that had reportedly come to the notice of the police earlier but were ‘amicably’ settled to protect the interest of the company,” an official source alleged.
The IMA scam is also under the radar of Central revenue and law enforcement agencies.
The Enforcement Directorate (ED) is “actively considering booking the Ponzi scheme company under the Prevention of Money Laundering Act. The ED will also examine the hawala (illicit money transaction done outside banking channels) angle and whether Foreign Exchange Management Act (FEMA) could be invoked against the company,” he added.
It is likely that the Special Investigation Team, which has been constituted by the state to investigate the multi-crore scam, may also invoke the ‘Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004’ against IMA but critics of the law say it is neither “punitive nor effective.”
So far, there has been no conviction under the Act because of “bureaucratic layers”, the officer said.
IMA ROPED IN CLERICS
The investments in IMA increased because the founder Mansoor Khan promised people returns as per Sharia law. “He had roped in the Masjid committees and clerics to spread the word on Halal investments. The firm assured investors huge returns along with the gold their investments could buy. Many of the initial investors got the promised returns and they brought in more investors. But after his business module started falling last year, Mansoor started advertising in newspapers and media houses,” an insider said.