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Mohammed Mansoor Khan of IMA group, the man behind the Rs 1500 crore scam in Bengaluru
Mohammed Mansoor Khan of IMA group, the man behind the Rs 1500 crore scam in Bengaluru|Screen grab from Mansoor Khan’s video
Crime

A Jewel Of A Scam 

How Mohammed Mansoor Khan convinced a large Islamic population to trust his ponzi scheme and cheated them of their life’s savings

Sandhya Ravishankar

Sandhya Ravishankar

46 year old A Ahmad (name changed) is a businessman in Bengaluru with a wife and a young school-going daughter and son.

Ahmad got the shock of his life during the holy month of Ramzan. Barely a few days ago, Ahmad had gone to the IMA Jewels office in the city and attempted to withdraw the Rs 10 lakh that he had invested in the “Islamic banking” scheme.

He was informed by the staff that he would get his money within 45 days. “They were very convincing,” recalls Ahmad. “They told me not to worry and that I would get my money.”

Panic struck over 70,000 investors in the scheme as an audio message was circulated via WhatsApp. The audio, purportedly that of Mohammed Mansoor Khan, founder-owner of IMA Jewels and a clutch of other firms, stated that he was ending his life as he was “tired of bribing police and politicians”. He also stated that a politician had taken Rs 400 crore from him before elections but that had failed to return the money.

Ahmad too rushed to the IMA store. What he saw was a mass of panicky investors demanding their money, many of them crying over lost life savings.

“I had put in money only two years ago based on word of mouth,” says Ahmad. “Initially I put in Rs 5 lakh in their education scheme and it worked out well because we got around 3% returns. It helped with school fees. Then my wife pawned her jewels and put in another Rs 5 lakh in a marriage scheme for our daughter. Now all of it is gone and I have to pay to get my wife’s jewellery back from the pawn shop also,” he rues.

The IMA or I Monetary Advisory, an “Islamic bank” which turned out to be a ponzi scheme, now owes its investors around Rs 1500 crore.

As a furore rose, the state government swung into action, setting up a Special Investigation Team led by senior police officer BR Ravikanthe Gowda.

A hunt began to find the whereabouts of Mohammed Mansoor Khan and his family members.

The politician referred to in the audio message was calculated to be Roshan Baig, a Congress MLA from Shivajinagar. He was summoned swiftly for questioning by the SIT.

Roshan Baig vehemently denied all claims of having played a role in the swindle.

Baig demanded a CBI inquiry into the issue and alleged a “hitjob” by political rivals.

“Never did I endorse the idea of investing money in IMA. My association with IMA was for developing PPP projects in Shivajinagar and the proof of that is seen in form of VKO school,” he tweeted on 12 June.

In the meanwhile, SIT sleuths had found Mohammed Mansoor Khan. He was far from dead. He had fled to Dubai along with some of his friends and family members.

Khan, under immense pressure to return to India and face charges, put out a video stating that he was prepared to come back to the country. “I wanted to come back to India for many days but I have been unwell. I have three blocks of 90% and 80% in my heart and my diabetes levels are not coming down below 600. In 48 hours, Inshallah, I will come back to Hindustan,” he says in the video dated 15 July.

He also prescribed some conditions for his return.

“We were sitting there in Dubai for almost 25 days,” said a member of the SIT investigating the IMA case who did not wish to be named. “He wanted to run to Europe because the extradition laws are tough there. But the Lookout Notice prevented him from leaving Dubai. The Blue Corner Notice issued also helped. He was trapped and he knew there was nowhere to go,” he said.

The SIT and the Enforcement Directorate refused to play ball. They “convinced” Khan to return to India and in the wee hours of 19 July, he was flown to Delhi in an Air India flight and arrested by the ED.

Who Is Mansoor Khan?

The gentle looking elderly man may be worth thousands of crores today but he started from a poor background.

Khan’s family hails from neighbouring Tamil Nadu, according to senior journalist Rizwan Asad who knew Mansoor Khan.

His parents shifted to Bengaluru in the 1950s in search of a living and the young Khan began his first job at a small fish stall in Shivajinagar.

Khan did not wish to go to college after his schooling was completed so instead he got a job as a sales representative with a private firm.

According to Asad, the ambitious Khan then decided to finish his B Com degree from Bangalore University before heading to Jeddah to make a career for himself.

This was in the 1990s. “He met Nowhera Shaikh of the infamous Heera Group and worked with her for some years. He deceived her and came back to India,” said Asad.

Shaikh was a good teacher it appears. The woman who ran a successful ponzi scheme worth Rs 500 crore from Tirupati, Andhra Pradesh, was finally arrested in 2018. She had promised high returns on “Islamic banking” of upto 40%.

How did Khan deceive Shaikh? “He took documents pertaining to Sharia law compliance from her so that he could execute the same in India,” he said. With two other partners, IMA was set up in Tilaknagar.

Mansoor Khan was a phenomenal networker by all accounts. Using religious leaders like ulemas, paying some and charming some others to promote his “Islamic bank” and other businesses, hobnobbing with politicians and celebrities, Khan became the face of the charitable and do-gooder Muslim businessman. He could do no wrong in anyone’s eyes.

Soon Khan expanded into the healthcare, education and real estate sectors, and with a total of seven companies.

Until 2017, when his downfall began.

The RBI, State Revenue Department & CID

The RBI smelt a rat in the dealings of the IMA and investigations in 2017 revealed that the firm did not possess the necessary permissions to collect money from investors.

A senior officer in the Karnataka police department who did not wish to be named told The Lede that the RBI had passed on the information to the state Revenue Department for investigation and action.

The CID was also in the loop. “The Revenue Department officials even submitted a report stating IMA was clean,” said the officer. “The Revenue Department authorities messed up. Their palms were greased,” he said.

LC Nagaraj, a Revenue Department official and Assistant Commissioner, Bengaluru North was arrested for allegedly giving a clean chit to Mansoor Khan’s businesses in return for a bribe worth Rs 4.5 crore.

Another revenue official, Deputy Commissioner, Bengaluru Urban, Vijay Shankar, Nagaraj’s boss, was arrested for allegedly taking Rs 1.5 crore as bribe to submit a report giving Khan a clean chit.

A village accountant by name Manjunath has also been arrested for facilitating a clean chit to Khan.

Apart from these Haneef Afsar Azeezi, a maulvi at a Shivajinagar mosque has also been arrested for promoting IMA in return for property and money.

How Did The Scam Work?

The structure of the scam is quite ingenious. Three of his seven businesses were LLPs or Limited Liability Partnerships.

Islamic Sharia law disallows Muslims from getting interest or riba. The LLPs were a vehicle through which investors could all be shareholders, buying and selling commodities like gold.

The returns of 3% or sometimes 17% that came to the shareholders/investors was “profit” from the gold business and not interest. All shareholders would share equitably in profit and loss.

K Girish, Deputy Commissioner of Police – Crime, who is part of the SIT told The Lede the details about how the businesses were structured. “Out of the total 70,000 investors, 40,000 people had invested in the LLPs. In fact a lot of investors are unaware as to whether they have invested in the LLPs or the co-operative society, the company (IMA Jewels) or the sole proprietorship (IMA Builders) that he created,” said Girish.

“95% of the Rs 1500 crore due to investors goes to those who put their money into non-LLPs,” he added.

“It is a clear ponzi scheme, there is no doubt about it,” continued Girish. “There is no profit generation at all. We have not calculated the income generated by his businesses fully but it is meagre, around Rs 50 crore. He (Khan) was giving much more than that in returns,” he added.

Senior journalist Rizwan Asad adds that it is unlikely that investors will get their money back. “It will go to court next,” he told The Lede.

Khan is staring at several severe sections slapped on him. The Karnataka Protection of Interest of Depositors in Financial Institutions Act, 2004, better known as the KPID Act, money laundering charges, cheating and income tax evasion.

“The SIT and the ED have to look for the money. There is suspicion that he could have invested in bitcoin currency. He has not paid his income tax at all and he may have to pay Rs 5000 crore fine. The litigation will take a very long time and it will be complex,” he said.

A Victim Of Circumstances?

The jury is out on that question as many victims of the fraud are unable to believe that they have been duped by a man who was so well respected in society.

Ahmad, the victim who spoke to The Lede said – “Still, people believe in him, they feel he is not the person who has done it, that there are other politicians and people who have done it. Police is involved, every department is involved. They feel he is a good person who has been used.”

Rizwan Asad describes Mansoor Khan as the golden goose for a number of powerful people. “He misused the media, he misused religious leaders, he used politicians. He was a wolf in the garb of a sheep. He became a golden goose for everyone. He thought that the politicians he had helped and bribed would come to his rescue when the going got tough. But no, that did not happen,” he said.

As for the SIT, there are no greys as far as Khan is concerned. “Not at all,” exclaimed K Girish, Deputy Commissioner of Police – Crime and SIT member. “It is a very simple fact. There is Rs 1500 crore missing. At the most he spent Rs 50 crore on bribes and other things. He is trying to get away by putting the blame on others,” he said.

Girish stated that Shivajinagar MLA Roshan Baig had submitted some papers on Friday which were being perused. “We may need two more sessions with him. We will give the next date after 22 July,” he said.

“We are not bothered about political ramifications,” said Girish when queried about the criticism levelled from some quarters about the nature of the case and questions over whether justice will be done. “If there is evidence, no one can stop us from arresting anyone or bringing them to book,” he said firmly.

Long Road To Payback

Investors though wait, some in hope, others without, hoping to glean some bit of information about the man who has duped them of their hard earned money.

History has shown that ponzi scheme victims rarely get their money back. Ahmad feels that his Rs 10 lakh is gone forever.

“We cannot come out of it. We just give in. We are crossing our fingers hoping to get out money back. I am not sure but I don’t think we are going to get it back, just forget it. But we have to fight for it,” he said, reflecting the spectrum of despair and anger that investors are going through.

When asked what he would tell Mansoor Khan if he saw him face to face, Ahmad replied – “Just please return our money.”

Ahmad says that he has personally learnt a tough lesson from this experience.

“The police have to stop these Islamic banks,” he said. “Very bad lesson I have learnt from this. The things some Muslim people do in the name of Islam, halal and Sharia, we don’t them trust them anymore. The trust is gone now,” he said.

(A previous version of this article published on 23 July had an incorrect surname of the senior journalist quoted in the story. It has been corrected in this version.)