IMA victims to receive fraction of their investments. Too little, too late?

Hameed Ashraf | NT

Bengaluru: A special court has approved the Competent Authority for I Monetary Advisory’s (IMA’s) plan to disburse Rs 69 crore that was recovered from auctioning of movable assets acquired in the scam.

This has instilled some hope among the victims of the Ponzi scheme. IMA promoter Mohammad Mansoor Khan, who set up the company way back in 2006, had duped about 69,000 depositors of Rs 4,000 crore, promising halal finance and sizeable returns.

As many as 55,126 investors now stand to recover a fraction of their losses in the next 20 days.

“What do I have to do? Stand in a long queue again?” asked a victim Anwar Haroon, hardly able to believe what the court had ordered. Sources from the Competent Authority told News Trail that the money will be deposited in the bank accounts of the depositors directly without the involvement of any middlemen.

“The list of investors is being analysed and it would take some time for the final list to be prepared. The money will be sent directly to the bank account of the investors,” an official said.

The official cited the possibility that the investors who have received a part of their returns during the first tranche might not be eligible for returns this time. Also, the investors who have already earned a considerable amount from their investments will also be exempted from the list, he added.

“The share will be calculated and divided among the investors based on various factors including most and least affected ones,” the official said. He added that those most affected will get a comparatively bigger settlement. “There will be no SMS verification,” he said.

Varied investments, big returns

Initially named Ilyas Mansoor Advisory, IMA was established in 2006 and earned huge returns, making investments in gold, clothing and infrastructure.

IMA and its sister Ponzi companies had lured the gullible investors, mostly Muslims, offering higher returns and promising halal investment, meaning that the company didn't take or pay any interest on the invested amount as the same is considered forbidden under Islam.

The 69,000 investors were left shocked after the scam was busted in June 2019.

Human cost of scam high

In the last four years, many victims have died for the payouts. Several marriages were called off and many families have split due to the loss of money. Rubina, who was pursuing her BSc in 2019, is now an employee of a Multi-National Corporation (MNC) in Bengaluru.

“My parents had sold land to invest in this scheme,” she said.

“They had hoped the monthly payback would help with my education expenses when I was studying. The latest court order has given them some hope,” she added.

Payouts date back to 2021

In 2021, the Competent Authority had auctioned several movable assets belonging to IMA and recovered Rs 19.62 crore. The same was used to settle the claims of over 6,000 small depositors who were owed less than Rs 50,000 each.

Later, the Competent Authority revealed they had also seized more valuables including diamond jewellery worth Rs 55 crore, gold, a Range Rover car worth Rs 1.50 crore along with other luxury cars including Audi and valuable furniture belonging to IMA.

The authority had then appealed to the special court to permit them to distribute this money.

However, the petition was dismissed. However, on Thursday, Shridhar Gopalakrishna Bhat, the Special Judge for Karnataka Protection of Interest of Depositors in Financial Establishments Act (KPIDFE) cases, accepted the formula and ordered the competent authority to settle the dues within 20 days and report back to the court.

“The fresh settlement scheme appears to be just, reasonable and equitable,” the bench said.

Congress MLA from Shivajinag ar Rizwan Arshad believes that the setting up of the competent authority was a step in the right direction since earlier state institutions took no responsibility to ensure investments were returned to the victims of Ponzi schemes, terming the new recent court order “good news”.

Previously, they simply sought to punish the scam as a criminal offence. Many of the victims are based in Rizwan’s constituency.

Others, still skeptical, pointed out that the scam had swindled investors of Rs 4,000 crore but the payouts, including the one approved by the special court, would amount to Rs 88.6 crore, a fraction of the investments.

What’s a Ponzi scheme?

In principle, a Ponzi scheme is one where a scammer accumulates sizeable funds with which he pays earlier investors.

Typicall