india

Updated: Jun 27, 2019 08:19 IST

Weeks after the founder of I Monetary Advisory (IMA), Mohammed Mansoor Khan, fled India, investigators are still trying to figure out how the Islamic investment group that has purportedly gone bust had managed to pay monthly dividends to around 70,000 investors until as recently as February.

Documents available with the Registrar of Companies, which were accessed by HT, show the companies Bengaluru-based IMA ran did not earn enough profits to pay back investors. In fact, contrary to Khan’s claim, no companies of his had been registered with the Ministry of Corporate Affairs before 2013, when IMA Private Limited was registered.

A Special Investigating Team (SIT) probing the ponzi scam run by IMA, which accepted money from investors it said would be parked in commodities and bullion, has estimated that the fraud was to the tune of Rs 1,500 crore. A ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent ones. In years subsequent to 2013, IMA launched IMA Bullion and Trading Private Limited in 2014, IMA Jewellery LLP, IMA Bullion LLP, MMK Institute of Education LLP, and IMA Women Empowerment Business Module LLP in 2015 and IMA Builders in 2017, apart from other companies. The books of IMA contradict the widely held notion that this was a a scam involving a limited liability partnership.

In the four LLP companies formed by Khan, there were a total of 223 partners — 181 in IMA Bullion, 20 in MMK and, 22 in IMA Women Empowerment.

The majority of investors in IMA were issued shares in the IMA Credit Co-operative Society. In this cooperative, investors were typically issued one share of Rs1,000 to make them members apart from their contribution to the society itself.

The contract states that IMA will invest in the “Indian Commodity/Bullion market” and assures returns “based on market volatility”.

A perusal of the books of the firms that dealt with the bullion market — IMA Bullion and IMA Bullion LLP — shows these ran losses. In 2017-18, IMA Bullion’s revenue was around Rs 13.91 crore, but expenditure was around Rs 13.93 crore. That year, the company suffered a loss of Rs 91,810, an improvement over the loss of Rs 1.94 lakh incurred in the previous year.

In the case of LLP, the latest data for the financial year 2015-16 shows that it incurred a loss of Rs 17,874; it spent around Rs 20.32 lakh against income of Rs 20.14 lakh.

IMA Jewellery, meanwhile, had no income in both FY 2018 and FY 2017 and incurred losses in both years. In FY 2018, it incurred a loss of Rs 8.38 lakh, which was an improvement over the Rs 9.40 lakh loss in the previous year. IMA Pvt Ltd, the parent financial advisory firm, fared much better. In FY18 it earned a profit of Rs 40.91 lakh, which was higher than the Rs9.71 lakh profit it earned in FY17.

Taken together, a senior official of the special investigation team tasked with probing the case said this was like any other cheating case. So far, it has arrested 12 directors of the various entities formed by IMA.

In light of this character of the IMA group, the SIT official said on condition of anonymity that the authorities had decided that the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004, could be invoked in this case.