Bengaluru: The alleged financial scam discovered by Bengaluru police has taken on political overtones with links emerging between two Congress members and the suspected mastermind Mansoor Khan.
However, MLAs Roshan Baig and Zameer Ahmed Khan, who are known rivals, have denied any connection with the alleged con, which lost over 35,000 people an estimated Rs 2,000 crore, with political analysts dismissing the allegations as a game of political point-scoring.
Khan, a Gulf-returned businessman who is believed to have escaped India, has run an investment company called I Monetary Advisory (IMA) since 2006. The firm began operations in the gold and diamond sector but eventually expanded into bullion trading, infrastructure, printing and publishing, healthcare, and perfurmeries, among others.
The scam was pegged on an Islamic law that deems interest ‘haram‘, with Khan promising investors enhanced returns on investment through other means: His company would buy cheaper gold and diamonds from abroad, then sell them in India on a profit, and distribute the proceeds.
However, investors, many of whom received money over the years, sensed something amiss when the returns stopped coming this January. They then laid siege to the company’s office in Bengaluru, leading police to lodge a case, form a special investigation team (SIT), and make several arrests, including seven of the firm’s directors.
Since 2006, according to police estimates, Khan may have conned investors in India and abroad of over Rs 5,000 crore. However, the over 35,000 complaints received since news of the alleged scam first emerged on 1 June come to a total of Rs 2,000 crore.
Baig’s name has been doing the rounds since the scam first came to light, when a man believed to be Khan was heard saying in an unverified viral audio that he had failed to pay back investors because of the bribes he had had to cough up to officials and politicians like Baig.
Baig, said to be planning to contest the Lok Sabha election but never given a ticket, had sought Rs 400 crore from him to fund his campaign, Khan purportedly claimed.
It was the release of this audio that led thousands of investors, several of them poor and from the lower middle class, to flock to the special counters set up by police to receive complaints.
Speaking to ThePrint, Baig claimed he had been “falsely implicated”, saying he had nothing to do with the IMA’s business transactions.
“A false SMS was spread on 1 June in my name… claiming that Mansoor Khan was a close friend and that I stand guarantee for all the investments he made and it was my commitment to safeguard investors’ returns,” Baig said.
“I have now decided to hand this over to the SIT, though initially I wanted to go to cyber police.”
The allegation of his involvement, which came soon after he called AICC general secretary K.C. Venugopal a “buffoon” ahead of the Lok Sabha election results, was “all a ploy to politically isolate” him.
Baig said he did try to help Khan, whose charity work he “admired through the years”, get a no-objection certificate from the Karnataka government for a bank loan of Rs 600 crore.
“I did go with Khan to meet (Karnataka Revenue Minister R.V.) Deshpande, to see what we could do about the IMA, which was under the RBI’s scanner (for alleged fraud),” Baig told ThePrint. “Khan also met another minister without my help, that does not make me involved with his business.”
Raj Kumar Khatri, the principal secretary of the revenue department, is said to have been the first to raise an objection to Khan’s proposal, Deshpande told ThePrint.
The minister, also a member of the Congress, reiterated Baig’s claims about the meeting for the Rs 600 crore loan, saying Khan had told him that the RBI investigation was causing “huge losses to his business”. However, Deshpande said, he told “both Baig and Mansoor Khan that whatever needed to be done would be done only within the parameters of law”.
“He (Baig) brought him to me, saying he was doing good work in his (Baig’s) constituency, Shivajinagar, where he (Khan) runs schools, hospitals and his gold business,” said Deshpande.
“But I wanted clarity on whether the IMA was still being investigated by the RBI. We contacted the law department and they replied that they wanted some more supporting documents to understand whether the IMA was still being probed. You can come a take a look at the documents yourself,” the minister added.
Deshpande said he had referred the file to the law department as a note prepared by the police department stated the transactions made by IMA did not attract the Karnataka Protection of Interest of Depositors in Financial Establishments (KPID) Act, 2004, which regulates financial establishments not covered by the RBI and outlines punishment for defaults on investor payouts.
The power struggle
There is an alleged power struggle currently underway in the Congress between leaders who seek to project themselves as the voice of Muslims within the party.
Baig’s camp alleges that party leader Zameer Ahmed Khan has been trying to sideline him and hurt his prospects for election as a Rajya Sabha member, with the former himself pointing towards his party colleague while dismissing the allegations as a “character assassination” plot.
Zameer Ahmed Khan, who has also been accused of links with the IMA, admitted that he had carried out a business transaction with Khan, but claimed that it was all above-board.
“It is true that I have had business transactions with the IMA, but it was to do with a plot I sold to them,” he said. “The cost of the land is Rs 9.36 crore and I have a sale deed to authenticate the transaction.”
Political analysts, however, see nothing but a game of political one-upmanship in the trade of charges.
“This is a classic case of striking when the iron is hot,” said political analyst A. Narayana, a professor at Azim Premji University, Bengaluru.
“Zameer is using this chance, where his rival Roshan Baig is in a vulnerable position, to assert himself as the minority leader in the Congress,” he added.
“As of now, Zameer is the top mediator, especially in the Muslim community, for the Congress, but if his involvement is established, it may have an effect on the government,” he said. “Until then, it is only about one politician exposing another.”
Another Bengaluru-based political analyst, Mahadev Prakash, said he believed “most politicians who have been named are hand-in-glove in this money scandal”.
“Be it real estate, education or financial transactions, it would all have thrived only with the blessings of these politicians,” he said.
“Be it IMA or the scam related to the steel giant Jindal Steel Works, the fact remains that such scandals affect the image of the government and, if it is proved that these legislators have a hand, it will be a big blow to the coalition.”
Prasad was referring to the Janata Dal (Secular)-Congress coalition in the state, which is said to be in a fragile state owing to differences between the two partners and alleged attempts by the BJP to unseat the government.