No action against fraudulent companies, Karnataka HC slams government

After the advocate representing the government submitted a report under the KPID Act on the status of the investigation, the court observed that no action was taken against the fraudulent firms.

With the Silicon Valley getting infamous for scams and Ponzi schemes, the Karnataka High Court on Thursday (October 31) lambasted the state government for not taking action proper against the fraudulent firms.

The HC bench headed by Chief Justice Abhay S Oka while hearing some public interest petitions asked the state government to file an affidavit over the present situation of actions taken in the notorious I Monetary Advisory (IMA) scam. IMA had defrauded nearly 40,000 of its investors to the tune of thousands of crores.

The officials have been investigating nine companies from Bengaluru including IMA, Ambident Marketing Pvt Ltd, Ajmera Group, Injaz International and others.

After the advocate representing the state government submitted a report under Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 (KPID) on the status of the investigation, the HC bench observed that no action was taken against the fraudulent firms by the government. The court found that not seized their bank accounts, properties under the KPID Act.

Mansoor Khan names political bigwigs, officials

The bench also observed that the government-appointed appellate authority only in the IMA case and no authority had been appointed against cases involving other companies, reports Deccan Herald.

The bench asked the government to file a compliance report by initiating action against these companies under the KPID Act before November 21. The bench adjourned the matter to November 22, adds the report.

The state government had directed the deputy commissioner of Bengaluru urban district to take strict actions against the companies and had directed to seize bank accounts and properties of the company owners. Even as so many cases of such fraudulent firms are emerging in the city, officials are not taking action against these firms.

The owner of IMA, Mansoor Khan had named several political bigwigs and government officials in the scam. He had claimed that several top-level officers have taken crores of rupees bribe from him to run the scam.