In Bengaluru, ponzi scheme victims are still waiting for their money to be returned

Victims of multiple ‘halal’ ponzi schemes in Bengaluru have alleged that the Karnataka government is not taking any steps to recover money from the accused and return it to the victims. The ponzi schemes include the high-profile IMA Jewels case, the Ambidant case, as well as the Injaz, Muzaribah, Aala, Burraq, Morgenall and Nafiya cases, among others, in which more than 20,000 victims, excluding those of IMA, have lost their money. The IMA scam case, on its own, has around 80,000 victims, including those outside the state.

Notably, the IMA scam is being probed by the Central Bureau of Investigation and a chargesheet has been filed against two IPS officers, among various other government officials. In other cases too, there have been chargesheet filed but none of the victims have been paid back, as per the Karnataka Protection of Interest of Depositors Act.

All these ponzi schemes targeted Muslims as fixed bank interest rates are considered as “haram” (forbidden), these companies sold their plans as a form of partnerships, with the promise of higher returns. Accordingly, the companies lured customers to invest their life savings by staying true to the offer for the first few installments.

Under the KPID Act, the state governments have to appoint a competent authority to identify the victims who will be compensated by selling the properties recovered from the accused. The victims allege even if the competent authorities (usually Assistant Commissioners of Revenue Department) are appointed, they have not been given any money to hire chartered accountants and other staff to undertake the process of issuing claim forms, going through the claims filed by the victims, or verifying if the seized properties of the accused can be sold to pay back the victims.

MJ Mohiuddin, who had invested in three of these companies including IMA, said, “The government system is not working for us. There has been a delay for more than a year. The cases have gone to the courts as early as 2018, but there has been not much progress on our claims. Many of the depositors have died. Even if the competent authorities are appointed, they are not given any money to cover their expenses required for probing the case. They have not been given any money to hire necessary manpower.”

Mohiuddin added that Chief Minister BS Yediyurappa had promised to help these ponzi scheme victims ahead of the 2018 elections, but nothing has been done from the government’s side. He pointed out that in the IMA case, the government has seized property worth only 400 crores, while the depositors had invested more than Rs 1,000 crores.

Narendra Kumar, an activist and VIce President of LanchaMukta Karnataka, an organisation which is helping many victims in these cases, said, “There are around 20 such ponzi schemes where the victims have not been told whether they will get their lost money back. It has been more than a year to 20 months since the cases went to court. For many cases like Ajmeera and Ambidant, the victims had filed claim forms as directed by the courts more than one and a half years ago. But none of the claims have been verified, nor have they determined if the seized properties can be sold or not to recover the claims.”

Narendra said that according to the KPID Act, the properties should be made absolute within a year’s time. He alleged that due to lack of adequate manpower, the competent authorities failed to comply with the court proceedings and are seeking time, which benefits the accused. Narendra had also approached the Karnataka High Court seeking speedy process of claims of all these ponzi scheme cases.