IMA Jewellery Scam – Bangalore’s biggest Investment Scam!!

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Now one more investment scam. This time from an IMA Jewellery or I Monetary Advisory. IMA Jewellery Scam claimed to be the Bangalore’s biggest investment scam as of today.

IMA Jewellery Scam

It is nothing but luring investors with high-interest rates. Promising them the as high as 3% to 5% returns means many uneducated (educated but financially illiterate) are the targetted class for this scam.

What is this IMA Jewellery Scam?

This time it is more with a particular section of society. The owner of this company belongs to a Muslim Community. As per Sharia law, Muslims are not allowed to benefit from interest income. IMA Jewellery used this clause and targetted the Muslim community in a big way.

IMA Jewellery claimed that they never give interest for whatever the investors invest with them. Instead, they will consider investors money as a business investment. It is like a profit-sharing business. You are turning to be a shareholder of IMA if you lent money to them. Hence, this promoted Muslims to invest in a big way.

Their modus operandi is simple. You have to invest in IMA Jewellery Business. As per IMA Group of Companies website, they have varieties of business. They will consider your money as partner money. In return, IMA Jewellery will give you 3% to 5% monthly returns.

Do remember that in this whole scam, nothing was done through cash mode!! Everything through bank transactions.

I discussed the procedure with one of the investors who invested around Rs.18 lakh. As per his claim, they used to issue an agreement copy and also a kind of passbook.

As per my knowledge, three things created confidence in this scheme to invest in the general public.

# You are investing not through cash mode. But you will give you the cheque to the company.

# You receive the returns directly in your bank.

# The funny part is that they deducted the money before they pay to the investors claiming TDS deduction. I am not sure whether the company deposited such TDS with IT Department or not is a big question mark. However, my doubt is that they just played with TDS drama to create an image that everything is legal. Maybe many investors not checked their Form 26AS also.

When all transactions are through ONLINE mode and there is a TDS also, then many of uneducated and in fact so-called educated also blindly started investing.

Above that, the LURE for higher earning overtook all the risks one has to look at. The returns of around monthly 3% to 5% a month. Yearly it is around 36% to 60%!!

How much big is the IMA Jewellery Scam?

Many say it is around 500 Cr to 1000 Cr. But yesterday in a single day, there were around 5,000 complaints registered against this company. Hence, the quantum of the scam is much BIGGER than what claiming so.

This first day 5,000 complainants may be invested their genuine money. But about those who invested their black money? They may never come forward to complain.

Many have invested in this scheme by borrowing the money as personal loan, pledging their assets or selling their assets.

Hence, I assume the scam is much bigger than Rs.1,000 Cr.

What we can learn from IMA Jewellery Scam?

# Any transaction ONLINE means not safe

Many of us feel that if we are investing or withdrawing money through online means it is well regulated. But take this classic example. All transactions were done without accepting through cash mode. But still, everything evaporated.

# There is always a nexus among scammers, politicians and bureaucrats

The owner of the shop, in his audio clip, mentioned that he used to pay a hefty bribe to many to retain his goodwill. He also claims that many politicians and bureaucrats tried to malign his name. Hence, to protect it, he used to pay the hefty bribe continuously. But the big question is that if someone is so ethical about his business, then why he has to fear with those who try to malign his name? Funny defense.

# Never rely on REGULATORS

This company may be registered with RBI or the concerned regulator. However, regulators failed here to protect the poor investors.

When all transactions were done through regulated mode, then why the regulators were in deep SLEEP?

# Never invest just because your friends or relatives invested

Many of us take our investment judgments based on what our friends or relatives share with us. However, keep one thing in mind. Your friends or relatives risk-taking ability may be much much higher than yours. Loss of around Rs.25 lakh may not be a big issue to your friends or relatives. However, a loss of Rs.1 lakh may be the biggest loss for you.

Hence, understand your risk appetite.

# Never be in a dream and chase the returns

None of the investors failed to understand the basic Maths here. If someone is giving you a yearly 36% to 60% means his income should much more higher than this.

But sadly none bothered about how the company will generate this much high return. What their investment style and where our money gets invested.

Rather than that, all invested just because 3% to 5% a month returns mean FANTASTIC.

This is one more classic example of a scam where we can learn many many things. Sadly scams never end because fools are always there.


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29 Responses

  1. The person responsible for creating this Scam shall be held accountable by the concerned Indian authorities. After all, this scam has done substantial damage to the mundane people having little or no knowledge of investment.

  2. Mr . Basunivesh did you tell anything about it before end.. no .. So a scam comes out to light, each dog barks.. so do you. Don’t tell people are fools..if you were so intelligent you should have told it before it happened..

    1. Dear Sadashiv,
      Did the investors who invested with LURE in their MIND shared with me that they are investing in such scams? NO RIGHT? Then how can I come to know? The only thing what in my hand is to make aware of others and learn from such mistakes. At the end I am not GOD that wherever people invest, I immediately come to know. Your logic is so funny to listen 🙂

      1. Yes, You are right. The comment by Mr. Sadashivis senseless and have no logic at all, nothing but one of the dog barkings.

    2. You are a guest on this blog and please use civilized language and be respectful. I can’t believe that you chose to insult the host just because he wrote an article based on the news item. By the way for your info, when govt issued a public notice whether they have any complaint against IMA last year, not one investor filed a complaint. I am really surprised that you are blaming and attacking an author just because he wrote an article on his blog.

      1. Dear Krish,
        I can understand such people’s anguish. He is in another world whereas he is unable to understand the realities to whom one should blame for such scams. Thanks for airing your views.

  3. the scamster was very cuning he used religiuos belief plus good returns to lure illetrates and also the govt & local regualatory let him run havoc without monitoring the institution..most ppl whom he has fooled have no knowlegde of finance or the religion they are just plain fools

  4. All persons who blame a Trusted household Name LIC for low returns should also learn from this type of fake schemes and recent mess in debt mutual funds.

    1. Dear Pankaj,
      I feel pity of your defense 🙂 None will support such illegal products. Regarding Debt Funds, if you don’t know what is the risk, then it is your problem but not the problem of others. Regarding LIC, the whole of India knows how respective central government uses the LIC money as a scapegoat. Don’t bring your personal attachment with LIC in generic comments.

    2. If you dont know, LIC bought debt-ridden, scam tainted IDBI bank from govt last year using policyholder money. And IDBI bank loaned to corporate customers which turned NPAs. There have been frauds too like the Siva Group fraud.
      Now LIC need to put more policyholder money into the bank because the bank has no money to lend.
      This is happening right in front of our eyes.
      Policy holders are paying for the loans that never came back.

    3. One mistake is done by the innocent investors and others are ready to hurt even more. Frauds such as IMA are causing instant loss of investors capital. Where as LIC policies acts like slow poison and policy holders lose out for the poor returns and inflation in the long run. People should realize that the end result in both cases is more or less the same. Those who got burnt by IMA, investors would become more vigilant and extra careful which could benefit in the long run but LIC holders would never even realize the hard truth.

  5. Basu,
    Funnily enough, they might not have told about TDS upfront. If they had told that, our Indian geniuses would not have invested their money. They would have given TDS shock the first time they paid back some money but without taking the PAN because our people wont realize or may not have one also. Imagine TDS without PAN 🙂

  6. Classic Ponzi scheme. An year back, HEERA Gold from Hyd did exactly the same and behind the bars now. It is unfortunate that religious sentiment and sharia law is being used to loot innocent muslim investors.

    There is a bit of psychology part as well here. Most of the people are used to informal lending where it is common to borrow from neighbors/friends/colleagues @ 3 to 5% interest rate per month. When an organized entity is offering similar rates, many could have of thought 3-5% per month is not a big deal. More so convincing because many might have thought a profit margin of business is generally more than 5%.

    But then lot of PMS fund managers, bond investors, Debt MF managers, Hedge fund managers and scores of small cap stocks investors lost out even with financial knowledge. These scams will continue and not the end of it.

  7. This jewellery company also sells gold without any making charges during offer period. The rush is so high that there was no space to comfortably stand too. Seems all this was done just to make big money later with this scam.

  8. this is seems like the classic scam, Want to learn “How to generate $$$$$ by Selling a book”…. 🙂

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