A con in the name of religion: Karnataka 'Halal Ponzi scam' victims await justice

On Wednesday, the usually busy Kandaya Bhavan in central Bengaluru which houses many government offices saw unusually large crowds. There were groups of men, many with long beards and women, mostly in burqas, waiting inside and outside the building with a mix of hope and despair in their eyes.

All of these men and women had lost their money to the tune of lakhs, some had even lost their entire life’s savings, to the Ambidant ponzi scheme. After many representations to various authorities and even flash hunger strikes, the Bangalore North Assistant Commissioner of the Revenue Department had finally called them for a meeting.

Scores of victims of the Ambidant Ponzi scheme heaved a sigh of relief as it was announced that the state government will work to recover the lost money in accordance with the Karnataka Protection of Interest of Depositors Act.

Ambidant Marketing Private Limited which was run by Bengaluru-based father-son duo Syed Ahmed Fareed and Syed Afaq Ahmed, collected money from customers in the name of “Halal Investment”. It offered huge returns to the extent of up to 12% interest per month.

Addressing a hall full of hopeful depositors, Om, the special legal advisor appointed by the government explained the entire procedure of how a special court will conduct a trial on the case of fraud. He also listed the documents that the depositors needed to submit.

An announcement that 15 properties belonging to the company would be utilised to recover the money lost by investors brought cheers from the otherwise impatient crowd gathered in the hall.

Om assured them, “The government is proactive but we want to exercise caution so that our submission in the court is foolproof and can’t be challenged by the accused in any way. Since we are going to attach their personal properties they will not leave any stone unturned to point at technical faults if not anything else to go scot free. At this point, we do not have a proper range of how much money they stole from people. In a court of law, that is very important, as there should not be a mismatch between their assets and liabilities.”

This case is independent of the probe being carried out by the CCB which has estimated the scam to be around Rs 1000 crore.

How people were fooled in the name of religion

Needless to say, an overwhelming majority if not all of those who assembled on Wednesday at Kandaya Bhavan were Muslims, since they were the primary targets of the scam. Being Muslim themselves, the father-son duo exploited the belief of the victims to their full advantage.

Unlike fixed bank interest rates which are considered to be anti-Islam, Ambidant sold their plans as a form of partnership business with the promise of high returns.

Syed Ahmed Fareed and Syed Afaq Ahmed had ensured that customers would get back their first instalment back as promised. This earned them trust and lured customers to invest even more after which the company would stop paying them back money including the principal amount. The accused duo are currently out on bail after facing arrest by the Central Crime Branch and a run-in with the Enforcement Directorate.

Faizan Assad, a Bengaluru-based lawyer, said that crores of rupees of the state’s Muslim community were stuck in the scam.

He told TNM, “They got so-called scholars and religious elders on their side and made them believe it's halal. Then they used these ‘scholars’ to endorse them. Muslims got fooled by this and invested.”

Zeeshan Jahan, a Mysuru-based businessman who was present in the meeting, had lost Rs 11 lakh of his savings. He said, “Although this was not fully halal, this investment was much acceptable to the community as it termed the customers as business partners in their real estate and other business dealings.”

Saleem, a 28-year-old Bengaluru resident who accompanied his 50-year-old father Rizwan explained the modus operandi. The company used agents who would convince their friends and family to invest and in exchange got heavy commissions.

Rizwan told TNM, “I had listened to a friend and invested Rs 20 lakh with the promise that the money would be returned in four monthly instalments and additional profits in the tune of 10-12% within a month. This is not haram as we won’t live on the interest of our wealth.”

Mallika*, a homemaker, who invested Rs 8 lakh of her savings said Wednesday's proceedings had given her hope.  “Prior to this, we have met twice for hunger strike but no action was taken. As Muslims, we are not allowed to invest in fixed deposits or other forms of guaranteed incomes. We were introduced to this scheme through a family friend, he also lost his money.”

Another victim of the fraud, who wished to remain anonymous, claimed that the entire political class including leaders of their community have failed them.

“We have approached leaders from all parties. MLAs like Roshan Baig and Zameer Ahmed Khan promised to help us ahead of elections but nothing was done,” he said.

The Ambidant case caught public attention since the arrest of tainted mining baron and former BJP minister Gali Janardhana Reddy in connection with the scheme in November, 2018. According to the CCB, Reddy had taken Rs 20 crore from proprietors of Ambidant with the promise of helping with cases filed by central agencies— Enforcement Directorate and Income Tax. Reddy is currently out on bail but the CCB is likely to name him in the chargesheet.