Gold, jewels, ‘Islamic’ finance: how India’s I Monetary Advisory built a US$365 million Ponzi scheme
- Some 50,000 investors have lodged complaints against the Bangalore-based I Monetary Advisory and its founder Mohammed Mansoor Khan
- India’s refusal to pass laws regulating Islamic finance means there is an unmet demand ripe for exploitation by unscrupulous actors
About 50,000 aggrieved investors, mostly Muslims, have so far lodged complaints against the Bangalore-based I Monetary Advisory (IMA) group of companies and its founder, jeweller Mohammed Mansoor Khan, claiming they siphoned off money to the tune of 25 billion rupees (US$365 million).
Some estimates suggest the true figure is much higher. According to local media, people from Hyderabad, New Delhi and Tamil Nadu have invested in the company.
The Karnataka state government has formed a special investigation unit to handle the snowballing scandal, and more than a dozen perpetrators – including two senior government officials – had been arrested as of July 9.
IMA, which began as a halal investment scheme promising lucrative returns in 2006, began expanding rapidly in 2013 through a series of marketing campaigns aimed at the Muslim community in the southern Indian state of Karnataka.
Shareholders could invest in multiples of 50,000 rupees (US$730), a relatively large figure for the middle-class investors being targeted. Less affluent Muslim labourers and daily-wage workers formed small groups to invest, as they could not afford to individually.
