Confused, hopeful, angry, worried: The many emotions being felt by Heera Gold investors right now

Photo: Social Media

Duping in the name of Halal investments is an issue that has left thousands of Indian Muslims confused, scared and angry. Muslims in two cities -Hyderabad and Bangalore are especially at the receiving end, yet there is every chance that unless you are from that region and following local media, you may have no clue that thousands of Muslims have been duped over just the past year in the name of “Halal”investments.

In these ‘Halal’ offers,  even more attractive than the Halal factor was the ridiculously high returns they promised to their investors. This, coupled with religious scholars who were too happy to promote such companies, meant that Muslim investors came in hundreds. Such smart marketing embedded with lies and deceit meant that these companies were easily able to fool people.

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In this five-part series, will look at how companies like Heera Gold, now at the centre of a confirmed Ponzi scheme, used a combination of religious symbolism, Ulemas, fake propaganda and political tools to attract investors in Hyderabad.  

Parallelly, in Bangalore, similar stories are emerging on a monthly basis, with over 10 companies having been exposed as either Ponzi schemes or fraudulent companies so far .

We will also look at successful examples of Shariah-compliant investments especially from the state of Kerala. We also get an expert to help us understand how to avoid such fraudulent companies, understand the basic concepts of Shariah investment to ensure that investors do not fall into the trap of Haram in the name of Halal. In the second of the five-part series, Nikhat Fatima looks at how the investors in Heera Gold have been left divided on whether they will recover their money or not and why the wait for them to see their money might just turn out to be very long.

Haram in the name of Halal (Part one)

The SEBI announcement calling Heera Gold a Ponzi Scheme had an immediate impact: by September, people started complaining of not receiving the monthly profits.

This was followed by the establishment of ‘Heera Victims Association’ by Shahbaz Khan of AIMIM . Over 200 victims came out in the open to protest and demand their money back from Heera Gold.

victims association ( Photo: social media)

And the second FIR was filed soon on 10th September by Farzanaunissa Mohammed Khaja, whose husband had invested Rs. 25 lakh in Heera Retail Hyderabad Pvt Ltd. The case was transferred to the crime branch.

Subsequently, Nowhera was arrested in Delhi and brought to Hyderabad on 16th October and granted bail on 25th October by the High Court of Hyderabad.

As soon as the news of the arrest of the CEO came out investors’ panic increased and people came out to give their statements against her.

But many also saw it as a political game by the rival party AIMIM.

One lady advocate who has been actively following the case told on the condition of anonymity that back in 2012, Asaduddin Owaisi had purchased government land worth Rs. 200 crore for a mere Rs. 4 crore. And Dr. Nowhera Shaikh had filed a PIL against the Government of Telangana. To avenge this, the people from MIM began instigating investors to file complaints with the police.

“ I know for sure that the investor who has invested Rs. 25 lakh and filed a FIR is a MIM person,” she said.

Photo: Social Media

And the reaction of many an investor and non-investor was that this was a AIMIM conspiracy because Nowhera Sheikh was contesting from Hyderabad in the coming elections as can been seen by their statements of support on social media.

Khalid Hassan, General Secretary, Awami Insaaf Movement and financial advisor told, “Heera Gold is running ponzi schemes which has become more clear now because as soon as the campaign was initiated by Shahbaz Khan for the victims of Heera Gold, all potential new customers stopped their investments. And Heera Gold did not have enough money to give ‘profits’ which is why the investors stopped getting their monthly profits.”

A conditional bail was granted to Nowhera after three days of argument despite the Central Crime Station police asking for her custody for further questioning in different cases registered against her by the Economic Offences Wing.

Nowhera was asked to surrender her passport and submit Rs. 5 crore to the court. She was released after giving a surety of Rs. 5 lakh. The metropolitan sessions court wanted to know why the police wanted to investigate when the Serious Fraud Investigation Office was already on the job. The court also asked the prosecution to produce proof that dividends were not paid from the last one year to which the DCP responded that they have no record of the investors as the company has not cooperated with the police.

Dr. Shaikh’s release sent a wave of joy among those investors who still trust her and believe that she will return the money soon.

The reason for this is the charity and humanitarian work done by Dr. Shaikh. She has established two residential schools that are run  free of cost for poor girls from Andhra Pradesh, as well as facilities for free medical services serving lakhs of villagers across Andhra Pradesh. During the recent floods in Kerala, Dr. Shaikh donated Rs. 1 crore to the CM Relief fund.

One investor, Abdul Majeed Imran, who is involved in Islamic activities in Hyderabad, told, “If we have invested in a business, we have to be prepared for both profits and losses. And now that we are not getting the dividends , we must accept it as a loss in business. How can we demand profits when there is a loss in the business? We invested in a business that is halal and asking for dividends when there is a crisis is wrong.”

Inauguration of Heera Mart in Kukatpally ( Photo Social Media)

Imran had invested Rs. 1 lakh after one of his friends who had invested Rs. 15 lakh and had regularly got profits from the last few years told him about Heera Gold. Imran says with Rs. 1 lakh it is not really possible start a business of our own so the best option was investing in Heera Gold. And he says he received profits every month between Rs. 3,500 to Rs. 3,900. The amount that was deposited in his account was never the same. It kept varying which is why his belief that this is not interest but definitely profit was strengthened. He believed if it was interest then the amount would be fixed.

Imran is happy that he has received so far Rs. 80,000 of the Rs. 1 lakh he invested. In his circle, he knows someone who sold his house for Rs. 50 lakh and invested in Heera Gold, eight years ago and ultimately got Rs. 1 crore back.

He said only once there was a delay in getting the profit and the company had sent a SMS apologising for the delay and asking to wait. And true to their words they deposited the profit after a few days. “Even a few days before her arrest, I got a SMS from the company asking me to wait as I had not got the dividend from the last two months. I am confident that once things gets sorted out, she (Dr. Shaikh) will give back our money. She is not a swindler as people would like us to believe”.

He feels had the people not been carried away by the protest campaign  of Heera Victims association, Dr. Shaikh would have somehow managed to repay the capital amount invested. Now after her arrest, with the offices closed and accounts frozen there will only be delay.

There are others who sold their properties and invested in Heera Gold in the recent times in the hope that their money will be doubled and are now waiting anxiously. They have neither joined the victims association nor complained because they have been told by the company officials that if they complain their payments will be delayed.

One woman, Sajida, residing in Red Hills had invested Rs. 10 lakh with the hope that by the time her daughter turns of marriageable age she will have enough money to perform a lavish wedding. She did it without the knowledge of her husband who works abroad. She said she believes Allah will help her and did not want to discuss further.

Ismail Khan, a resident of Yakutpura who returned from Saudi Arabia, invested Rs. 3 lakh also because a friend of his told about the huge success of Heera Gold company and added that it is 100% halal. “ I went to the Heera Gold office in Banjara Hills, saw the ambience where every employee was Muslim and I was convinced. I invested in February and got profits around Rs. 9,000 to Rs. 9,500 for about three months after which the profits stopped coming,” he informed

Office of Heera Gold with customers swarming in the heydays ( Photo: Social media)

On a sad note he mentioned about another acquaintance of his who had invested Rs. 10 lakh which was his settlement when he came away from Saudi Arabia along with him. “Anwar Bhai had just invested and the dividends had not even begun that news of the company being fraud and the arrest of the CEO came to light. He lost everything he had earned in Saudi,” he says with sadness.

Investors are also now organising. The investors of Heera gold have formed an association called “Heera Group Investors Welfare Association”. Investors met in Retibowli which Ismail Khan had also attended. There, they decided to collectively complain to the police. So every person’s investment details and details of the certificates issued to them by Heera Gold were taken. Ismail now awaits for the next meeting of the investors through which he will be informed of the next step. He says, “I am with all the investors. We will decide jointly and take action together,” he added.

Syed Sayeed Ahmed Ishaqi who was about to invest but changed his mind after recalling another similar halal investment venture in Hyderabad called “ Al Fullah” which is an Arabic word meaning  ‘sharing goodness’ run by Saeed Bahi, told, “Saeed bhai also gave halal profits to his investors 10 years back. And ran his company successfully till it closed down three years back when he said there are losses and stopped giving profits. The people bayed for his blood but he cleverly surrendered himself to the police to escape from the furious crowd.” He said Muslims are very gullible when people tell us that it is halal trading and we will be avoiding haram and pleasing Allah in the process. He gave the example of Charminar Urban Cooperative bank where people embezzled millions of rupees ultimately driving the  chairman Syed Alamdar Hussain Sajjad Agha to commit suicide.

Coming back to Heera Gold , Dr. Shaikh’s luck was short lived because hours after coming out of the Chanchalguda jail, Hyderabad, she was arrested by the Mumbai police who were waiting for her in a Rs. 500 crore fraud case. At the time of filing this report, Dr. Shaikh was in custody and the investigation continues.

It will be quite a while now for all those have pinned hopes on her to get back their investments.

The third part will look at how a similar financial ‘epidemic’ has spread in Bengaluru and what options the people have to recover their money.