IMA Jewels scam: Fraud in the name of religion

The higher you rise, the harder you fall.

This sums up the business trajectory of I Monetary Advisory (IMA), a company founded in 2006 by Mohammed Mansoor Khan. Until 2015, few people had heard of it. Khan, a Gulf-returned Bengalurean, tapped the so-called Islamic investment market to the hilt and quickly built a diversified business empire.

As of June 10, when the company suddenly shut down and Khan went incommunicado, the IMA Group had businesses encompassing bullion trading, retail jewellery, gold finance, infrastructure development, housing, book publishing, print media, education, healthcare, perfume and what not.

Khan targeted Muslims who shy away from investing in interest-based businesses. The company’s tagline was catchy: Your partner to (the) path of prosperity. Investors were called “sleeping partners”.

IMA offered a bouquet of attractive investment schemes with monthly, quarterly and yearly returns. The amount to be invested was Rs 50,000 and its multiples. Withdrawing from the scheme was touted to be hassle-free: get your money back after 45 days.

The company claimed to trade in gold and silver bars. At its peak, it doled out a 7% monthly profit. A person investing Rs 1 lakh made a neat Rs 7,000 a month. In a little over a year, s/he could easily recover the entire investment.

But this profit percentage didn’t last long. It first went down to 5% before averaging 3% until February 2019. Investors started to panic when the company paid them just 1% in April 2019 in lieu of business for the previous month. Things came to a head in May when many investors didn’t receive any profit. The company’s head office — IMA Tower on Bowring Hospital Road in the heart of Bengaluru — was soon swarmed with harried investors.

IMA tried to put up a brave face, saying it was in “sound” financial health and cited the temporary slowdown in bullion trading because of the general elections and the poll panel’s squeeze on investment. It claimed that profits had been paid out to 70% of the investors and that the rest would get it soon. A schoolteacher from Benson Town was among the lucky few to get the profit for April. In May, she received about Rs 3,000 on an investment of Rs 1 lakh.

Investors felt reassured but many applied for withdrawal of their principal investment. But the company was in a deep mess. It couldn’t return the money.

A resident of JC Nagar who sought to withdraw his Rs 2 lakh in March was promised that the money would be credited by May 15, at the end of the 45-day lock-in period. The date was pushed to May 25 and then to June 5. Then came the announcement that the company’s offices would remain closed between June 5 and June 9 for Eid holidays. IMA promised to return the investors’ money on June 10. But the day began with Khan’s now infamous audio clip.

A retired professor of economics whose family invested a total of Rs 6.5 lakh was livid: “This is not Islamic investment. This is pure cheating,” he told DH. “If the company had suffered losses, it should have stated so. We are business partners and must share the loss if any. Why didn’t the company take us into confidence?”