A Rs 2,000-Crore Scam Becomes Political in Karnataka

Congress leader Roshan Baig, who had recently spoken against the party, has been accused of taking money from IMA.

Roshan Baig is accused of taking money from IMA by the absconding promoter.

(Photos: The Quint)

A day after a Bengaluru-based promoter of an investment group went absconding along with Rs 2,000 crore raised by the company, claiming ‘political pressure’, the investment scam is becoming a political controversy.

Over 3,000 investors of I Monetary Advisory (IMA) have been left in a lurch after the promoter of the group, Mohammed Mansoor Khan, went absconding and claimed he would commit suicide, in an audio clip.

The scam took a political turn, when in the same voice note he accused Congress MLA Roshan Baig of taking Rs 400 crore from IMA to contest general election, which he didn’t return.

Roshan Baig had spoken against the Congress in Karnataka recently.

Too caught up to read? Listen to the story here:

The Audio Clips

Investors of IMA learnt about Khan’s disappearance only after an audio clip began doing the rounds on WhatsApp. In the audio Khan can be heard saying: “I worked for 12-13 years to build this company. There is corruption at state and central level. We have to bribe bureaucrats and politicians… Roshan Baig did not return the money, but sent rowdies to the store and my home, giving death threats. I had to hide my family in some village."

On Tuesday, he released a second audiotape in which he said: “I am alive. There is a conspiracy that I have committed suicide and that I have absconded. But I am in Bengaluru and there is a conspiracy to drive me out of Bengaluru. I will return all the money I have taken from the people. Behind the conspiracy to drive me out is local MLA Roshan Baig, Shakeel Ahmed and Rahel. They are conspiring against me,” he said.

Special Investigation Team Formed

Soon after these developments, Karnataka Chief Minister HD Kumaraswamy intervened on Tuesday, 11 June. On his orders, the investigation into the case has been taken away from the local police and a Special Investigation Team has been ordered to probe the case.

Even though Karnataka Home Minister MB Patil held a meeting with senior police officers in the state, the team that will probe the case is yet to be announced.

What is the Scam?

The investment in IMA Jewels was based on halal investment, which is based on the Muslim shariat law. Under this practice, the company wouldn’t take or pay any interest, and instead partnerships are offered.

“It is an <b>LLP</b> (Limited Liability Partnership). In the Muslim community, there is no scope for taking interest, so they have created this <b>LLP</b>, where every investor, however small or big, is a shareholder. And there has been a malpractice”

Karnataka Home Minister MB Patil

Investments in the company started from Rs 50,000 onwards and investors were promised a return on 3% on their deposits. The firm in turn invested this money on several businesses like gold, clothing or infrastructure. Since their biggest investment was gold, the parent company I Monetary Advisory was commonly known among people as IMA Jewels.

The total investment in the company is estimated to be around Rs 2,000 crore, said investigators.

Initially, payments were made as promised. But in the past few months, the payments were either below the promise or in some cases no payments were made. Amidst this uncertainty, on Monday, 10 June, the shutters of the company were downed and the promoter went absconding.

The Political Controversy

Congress leader Roshan Baig slammed the leaders of his party in Karnataka.(Photo: Altered by The Quint)

The investment group had connections with senior Muslim politicians in the state. Karnataka minister for food and civil supplies Zameer Ahmed had even listed Rs 5 crore as a liability to IMA in his election affidavit, which he recorded as an advance paid for a land deal.

Allegations of malpractice levelled against Roshan Baig come days before the Cabinet expansion.

Baig was one of the MLAs who had spoken against the Congress leadership and criticised Siddaramaiah.

He had alleged that the party leadership’s decision to avoid senior leaders in the party led to the Congress’ failure in the parliamentary elections.

Baig in a statement dismissed the allegations and said he was not a stakeholder in the company.

According to a report in the The Times of India, Baig claimed these allegations were the handiwork of his political opponents.

While the BJP has accused Kumaraswamy of having prior knowledge of the scam, the government has given Home Minister MB Patil the responsibility of overseeing the investigation.