Daijiworld Media Network - Bengaluru

Bengaluru, Nov 22: In a swift development after a day-long questioning, the Central Bureau of Investigation (CBI) arrested former Karnataka Congress minister Roshan Baig for his alleged involvement in the multi-crore IMA ponzi scam in the southern state, an official said on Sunday.

"Baig was arrested after questioning him in the ongoing ponzi chit fund scam investigation and a competent court sent him to judicial custody for further interrogation," CBI spokesman R K Gaur was quoted by IANS.

The former Congress minister had been disqualified by the party last year for rebelling against the state leadership.

Baig had been summoned to the CBI office on Sunday morning. According to sources, his residence was searched and he was arrested in the evening based on material evidence after day-long questioning.

Baig was later produced before a judge and remanded in judicial custody.

"Baig was taken into custody and sent to 14-day judicial custody after he was questioned during the day for his involvement in the IMA ponzi scam," a CBI source was quoted by IANS on the condition of anonymity.

Baig (67) is a 7-time legislator from the Shivajinagar assembly segment in the city and was a minister in the Congress and Janata Dal (Secular) governments.

The I-Monetary Advisory (IMA) Jewellery kingpin Mohammed Mansoor Khan alleged that he had given Rs 400 crore to Baig ahead of the state assembly elections in April-May 2018.

Baig, however, denied the charge and said Khan had falsely implicated him.

The Rs 4,000-crore ponzi chit fund scam came to light in June 2019 after hundreds of investors complained to city police that the chit fund firm stopped returning their deposits, including gold jewellery, cash and interest.

In an audio clip to then Bengaluru police commissioner Ajay Kumar Singh, Khan alleged that Baig was harassing him for more money and he fled to Dubai in June second week as his life was under threat.

Though the former Janata Dal (Secular)-Congress government had set up a special investigation team (SIT) to probe the scam, the ruling BJP government transferred the case to the CBI in August after it came to power in July 2019.

Khan was flown to Bengaluru on July 20, 2019 via New Delhi from Duabai and has been in the central jail on the city's outskirts along with about 30 accused, including seven directors of the company./

The Enforcement Directorate (ED) had also booked Khan under the Prevention of Money Laundering Act (PMLA) for allegedly transferring funds to overseas banks through the hawala route.

Baig allegedly helped Mohammed Mansoor Khan, the main accused, in fleeing the country.

In 2019, Baig had been detained by the SIT after his name cropped up in a video by Mansoor Khan, where he alleged that Baig had been extorting money from him. 

The IMA ponzi scam involves unauthorised deposits allegedly collected from a large number of depositors to the tune of Rs 4,000 crore, and the illegal activities of the IMA company had continued unabated and several thousands of investors had lost crore of rupees.

The CBI had registered four cases in connection with the said scam. CBI had earlier filed several charge sheets in the scam.

It may even be worth noting that the IMA company first came to the attention of authorities in 2015 because of the large discounts that IMA Jewels was giving on purchases of gold in its stores, but nothing was done because of a legal loophole and inaction by investors.

The Reserve Bank of India (RBI) suspected the company of being a ponzi scheme and tipped off the Revenue Department. However, the latter was unable to take action for two reasons: first, the Karnataka Protection of Interest of Depositors in Financial Establishments Act (PIDFE) only allowed action to protect depositors, and an Islamic banking company is structured so that people paying money to it are legally partners in the business and not investors making deposits, and second, no-one actually complained whilst the company was still paying them.

The I-Monetary Advisory was a company co-founded in 2006 by Mohammad Mansoor Khan and a business partner by the name of Iliyas, which they gave the name Iliyas-Mansoor Advisory.

Though this company was not successful, and was dissolved in 2008. Mansoor Khan's next company kept the same IMA initials.

Mansoor Khan encouraged ulemas and other people with influence in the Muslim community to believe that it was a continuation of the same company founded in 2006 and was a successful business of several years' standing, promising them that the company would build hospitals and schools.

Under the umbrella of the IMA Group, it quickly diversified into other businesses, including jewellery with the name IMA Jewels aka IMA Jewellers, real estate IMA Builders and Developers founded in 2017, bullion trading IMA Bullion and Trading founded in 2014, IMA Bullion in 2015, and IMA Gold, groceries Mulberry Greens, pharmacy Frontline Pharma, hospitals Frontline Multispeciality Hospital, and publishing.

With IANS inputs