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Ponzi Firms Overrun Bengaluru

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Caring for the Creation

By Maqbool Ahmed Siraj
The booming job opportunities that Karnataka’s capital provided for well over the last quarter century had won it the sobriquet of ‘a land of opportunities’. But of late, the city has also emerged as the prime destination for fraudsters, mostly mobilizing money from gullible techies through Ponzi schemes. A host of such schemes have sucked thousands of naïve Muslims dry during the last three to four years. Ironically, these investments were sought in the name of ‘Halal’, ‘interest-free’ and ‘Shariah-compliant’. Virtually thousands of crores of rupees, hard-earned money of hundreds of investors, have been looted by a clutch of fraudsters who had barely anything to do with business or finance. Several of them are on the run, eluding the law’s hands, while some among them have even managed to get bail even as they do not tire of vowing ‘to return every single penny due to the investors’.
Defaulters all 
Names like Ambidant, Injaz, Morgenall, Ajmera, Easy Pay Cash (EPC), Aala Ventures etc appear prominent among the companies who have defaulted payments to the investors. Mainly based in north-eastern quarters of the city, these companies had mobilized deposits and investments promising unrealistically high returns. Some of them, in fact, did return some money by way of ‘dividends’, only to go back on their promises later. The ones who were lucky to receive a few ‘installments of dividends’ spread the ‘good word’ around and brought into the trap larger numbers. What is plain from the investigations into the affairs of these companies is that they floated the companies not to do business but to lure gullible people with promises of attractive returns and had no business activity on the ground to show. Several of these companies advertised their schemes in Urdu dailies and even flashed pictures of the directors with leading Islamic clerics of the city to lend credibility to their exaggerated claims of Halal profits.
Life’s Saving Gone
People who have invested their life’s savings are now running from pillar to post to get their money back””at least their principals””but without any success. Several police stations were even refusing to register the FIRs against the defrauding companies. Strangely enough, no Muslim politician has come forward to listen to the pleas of the aggrieved ‘investors’.  The task of organising them was left for Aam Aadmi Party (AAP) in Bengaluru to organize a public protest at Maurya Circle against the organized fraud and complete insensitivity by the powers that be to bring the offender to book on December 15. 
Downed Shutters 
Meet Syed Yusuf, a retired principal of the Govt PU College at Srinivaspur in Kolar district. The retired civil servant, who now lives in Bengaluru, and six members of his family, some of them doctors, had invested over Rs. one crore in a company called ‘Injaz International” in 2016. Besides they invested Rs. 1.80 lakh in Ambidant and another Rs. 14 lakh in Easy Pay Cash (EPC), a firm based in HSR Layout. The companies have all but downed their shutters.
Enticing Offers 
Zakir Hussain, aged around 50, a leather businessman from Chennai, is also cursing his fate for investing Rs. 2 lakh in Morgenall Cooperative Society Ltd based in Horamavu Main Road eight months ago. He says the Society remitted Rs. 50,000 towards the first instalment of dividend. But since then there is no response from the Society. An advertisement from the Society in a leading Urdu daily from Bengaluru had promised upto 24% of annual profits.
No Clue 
Zubair Ahmed, a civil engineer from HSR Layout, had invested Rs. 7 lakh in Ambidant in February 2018. The company paid him ‘dividend’ to the tune of Rs. 1.65 lakh in March. But that was all that he heard from them. Three of his family members had invested another Rs. 16 lakh in a firm known as ‘Ajmera’ in February 2018. The firm has shut shop and Mr. Ahmed has no clue about the company.
Bit of Luck 
Mohammed Atheeq, a computer operator who had invested Rs. one lakh in Ambidant in November 2017, was luckier. He got back Rs. 36,000 in December 2017. But that was the end of ‘dividends’ from the defaulting firm. In fact, that was how the Ambidant Marketing established its credentials to lure more investors into its net. The firm’s managing director, Syed Fareed Ahmed was arrested, but is out on bail.
Devious Ways 
Ambidant had done some marvelous social media marketing through YouTube, Facebook and Instagram and even floated a fans’ club to spread its tentacles. Significantly, social media has emerged as a handy tool for fraudsters to widen their net for preying upon gullible clients. The print media, first being an expensive medium, and, secondly, applying filters to keep out dubious and spurious firms, used to be a credible medium for genuine companies. But social media, being a free-for-all medium, has allowed all sorts of characters to deceive the people. Its reach being wide, ponzi firms can reap the harvest in quick time. It is what happened with the Bengaluru fraudsters who by just doling out the first and second installments, lured vast number of investors into their devious parlour.
Fraudulent Offer 
Look at this! The Ambidant Marketing had offered (through advertisements) a new scooter to all those who book a bike by depositing Rs. 40,000 and wait for four months for the bike to be delivered. Many were taken in by the offer. Syed Mahmood (name changed on request) of Bengaluru indeed got his bike within four months. But his Mysuru-based niece Sufiya Begum (named changed), who believed the Ambidant’s offer (and believed her uncle’s words) and deposited the money a year ago, is still waiting for the bike now that the firm is snared into legal cases and is almost out of business.
What is galling is the fact that even those who know for sure that no business can yield such unrealistic profits get deceived by such fraudulent firms. Maaz Ali Khan (name changed on request), 51, a businessman is one such victim. Himself being a businessman, invested Rs. 10 lakh in Ambidant only four months ago and another Rs. 5 lakh in Ajmera. He has received no ‘dividends’.
Director on the Run 
For Azim, 35, an IT professional with Hewlett Packard, the record has been mixed. He invested Rs. one lakh in Ambidant in October 2017 and recovered Rs. 72,000 through ‘dividends’. Similarly, his investment of Rs. 10 lakh in Aala Ventures, returned him Rs. 6 lakh in the first three months. But Morgenall Cooperative Society has all but disappeared with Rs. 3 lakh that he invested in September 2017. Police is on the lookout of Director-couple Irfan Pasha and Makhdooma Fathima, who are alleged to have fled to Qatar, a Gulf nation which currently offers visa on arrival.
Sharifa Suleman (named changed) invested Rs. one lakh in Ambidant in January 2018, but has not heard anything from the firm thereafter. Similar is the plight of Raheema Khanum, 45 (named changed) who invested Rs. 12 lakh for herself and in the name of her two children in November 2017. She has been visiting the firm only to find the shutters down. However, her investment of Rs. 4 lakh in Ajmera yielded her a return of Rs. 1.45 lakh in the first two months. All that she came to know later is that the company directors had been arrested.
Mounting Arrears 
Morgenall even started a school, namely Arafah School, hiring the premises of Rifaa Home for Girl Child in Hennur Road. The school has not been paying rent for the premises for the last several months. Rifaa’s hony secretary Sofiya Begum has been running from pillar to post to get the arrears cleared which have surpassed the advance from the school management. The school is into its third year.
It is indeed sad that Bengaluru has emerged as the fraudsters’ capital in recent years. Most of such firms, societies and banks were run by Muslims. Years ago Bangalore Mercantile Cooperative Bank disappeared with money of shareholders and depositors. Thereafter, Amanath Cooperative Bank suffered with sanction from the Reserve Bank of India for having expanded its NPAs limitlessly. Transactions at the bank were placed under a moratorium. It is now only a pale shadow of its former self. Al-Ameen Islamic Financial Investment Corporation disappeared without a trace of its existence. Barkat Investment on Queen’s Road cheated hundreds of its investors and depositors. The investment companies have all but vanished from the scene, having defrauded several thousands of Muslims.
It is time for serious soul-searching for the Bengaluru Muslims as to why they are recurrently bitten from the same hole. ‘Halal’ and ‘Interest-free’ have become the buzzword to cheat people of hard-earned money. The sentimental appeal of the terms deludes an average devout Muslims, who is equipped with little financial literacy to gauge the market, scrutinize promises and find out for themselves if businesses could yield what is being promised. It is time some NGOs inject some realism into the narratives that are common among Muslims. n