The probe into the Rs 2,000 crore ponzi scam perpetrated by I Monetary Advisory (IMA) based in Bengaluru that cheated several depositors has taken several turns. While the Special Investigation Team probing the case is looking into IMA CEO Mohammed Mansoor Khan’s past dealings, there are also allegations that the man who is known to have strong political connections and fled the country, was aided by a few in the police department.
On allegations that the Bengaluru police did not take the Revenue Department’s public notice stating that IMA was carrying our fraudulent activities in November 2018 seriously, SIT sources say that they are looking into whether any police officials were involved in covering up Mansoor Khan’s tracks since 2015. In April 2017, Mansoor Khan filed a case against Janasri TV CEO Lakshmi Prasad Vajpai alleging that Vajpai was trying to extort Rs 15 crore from him. Did Vajpai have incriminating evidence against Mansoor Khan and IMA’s illegal dealings?
SIT sources say that the probe has unravelled several details about Mansoor Khan and his sudden accumulation of massive wealth. Which brings us to the question – Who is Mansoor Khan?
Humble beginning
Hailing from Tamil Nadu, Mansoor Khan’s parents arrived in Bengaluru in the 1950s and lived in Mackan Road in Shivajinagar. At the age of 18, Mohammed Mansoor Khan, decided to work instead of going to college. Mansoor Khan started working as a sales representative.
Later, he decided to obtain a degree and studied B.Com in Bangalore University. Unable to find a job in Bengaluru, Mansoor Khan left for Dubai in late 1990s, where he worked as a sales representative in a jewellery business run by one of his relatives. It was here that Mansoor Khan learned the ropes of gold trade, SIT sources say. Upon his return, he went to Chennai, where he obtained a post graduate diploma in jewellery design.
He then joined Heera Islamic Business Group run by the controversial Nowhera Shaikh, where he allegedly learned the inner workings of Ponzi scams by showcasing them as halal investments. “He learned where to buy gold for cheap and bring it back to sell it for higher prices at Heera Gold. One of the first businesses he set up was IMA Jewels,” an SIT official said.
In 2006, Mansoor Khan decided to establish a similar financial advisory company. As a resident of Shivajinagar, Mansoor Khan had allegedly rubbed shoulders with gangsters in the area. Police say that Mansoor decided to enlist the help of a gangster named Iliyas, who was to invest Rs 50 lakh into the company. While Iliyas was the one bringing in investment, Mansoor was allegedly the salesmen, who was trying to lure more investors. Thus, began Iliyas-Mansoor Advisory, the first IMA.
“At the time, there was no one who took him seriously. He did not possess a good reputation due to the people he mingled with. So, the company was dissolved by 2008,” an SIT official added.
IMA and Mansoor Khan’s rise
By December 2013, Mansoor Khan had allegedly decided to take a different route – to gather the support of the religious leaders from his community in order to drive investment into his new venture. With paid-up capital of Rs 1 crore, Mansoor Khan and his closest ally Nasir Hussein started I Monetary Advisory in December 2013.
“Mansoor Khan began convincing the ulema in Bengaluru and several other districts in Karnataka by stating that his company has been in existence since 2006. Although it was technically not true, the ulema were convinced by his plan. Mansoor Khan promised 10 times more than what was invested. Of the profits earned, he promised to give 70% of it to investors, retain 15% for company expenses, use 10% for charitable works and keep the remaining money for himself. He promised the ulema that he would build hospitals and also open a school,” SIT sources say.
By 2015, IMA had over 10,000 investors and the numbers only kept increasing. In 2015, Mansoor khan opened IMA Jewels in Jayanagar. “IMA Jewels used to give out 20% to 50% discounts on gold to its investors at its showroom in Jayanagar. This is when the Income Tax Department began getting suspicious. In April 2017, the Income Tax Department had conducted a search and seizure operation at various properties owned by Mansoor Khan. He was under investigation for not filing returns since the 2015-16 fiscal. I-T had received a tip off from the RBI in 2015 itself,” SIT sources added.
IMA offered members of the Muslim community ‘halal’ investment options. According to the Sharia law, it is considered ‘haram’ (prohibited) to draw interests (riba) on money. ‘Halal’ options are considered ethical wherein the amount can be invested in trade of commodities accepted under the Islamic law and a profit is shared with the investors.
Between 2016 and 2018, the IMA Group of Companies had a school, a multi-specialty hospital, a supermarket chain, gold trade business and construction company under its umbrella.
SIT sources say that Mansoor Khan allegedly got three influential ulema in Bengaluru to endorse his company and also got powerful politicians to attend IMA functions. He allegedly worked for several election campaigns of a senior politician in Bengaluru and is said to have rubbed shoulders with those in power in the state.
Under the lens of state and central agencies
Investigators say that Mansoor Khan was under the lens of the RBI, the I-T Department, the government and the police. However, with no investor coming forward to file complaints, Mansoor Khan allegedly got away for three years. The RBI had first issued a notification to the Karnataka government in 2015 that IMA was indulging in a Ponzi scheme. The Revenue Department, however, dropped its probe when it found that the investors were listed as partners, according to the investment bonds, and not depositors in IMA.
According to the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2006, partners of a firm are excluded as “depositors.” In the case of IMA, every investor was termed a "partner" as per the original bonds. The Karnataka government had in 2015 decided to avoid prosecuting Mansoor Khan due to this loophole. Sources in the Revenue Department say that a cabinet minister at the time, had intervened and ensured that IMA got a clean chit.
In 2018, when a section of investors stopped getting their monthly dividends, the company once again came under RBI scanner. This time, the Revenue Department decided to probe the matter and had also issued a public notice regarding IMA’s fraudulent activities in November 2018. Central Crime Branch police say that the economic offenses wing was already investigating Mansoor Khan when a similar halal investment company -- Ambident Marketing -- was exposed for indulging in a Ponzi scheme. "Many people who had invested in Ambident had also invested in IMA. But in November 2018, there was not a single complaint against IMA and so we could not do anything. The case was even given to CID but they could not do much either," a CCB source said.
When IMA shut down on June 10, investors were left with two audio clips purported to be suicide notes recorded by Mansoor Khan. However, on June 13 the SIT learned that he had fled to Dubai with his fourth wife and two children. The SIT conducted raids on several of his properties since June 10 and on Monday raided the home of his third wife, Tabassum. “We recovered 1.5 kg gold, 2.5 lakh cash and some documents. His third wife is cooperating with the investigation and has given us a laptop in which she says Mansoor Khan had kept crucial information. We are looking into it now,” an SIT official said.