India: Muslims set up 'halal' Ponzi scheme to rip off other Muslims

Heera Gold was touted as the ideal Muslim financial vehicle for halal investments and high returns

Sunday 25 August - Shaba Afreen, a media professional, invested Rs 20 lakh in Heera Gold in 2016. A resident of Tolichowki in Hyderabad, and a single mother of three, Afreen in 2018 found herself on the streets along with her children, when the company stopped paying monthly dividends, and refused to let her withdraw her investment.

She had fallen victim to a halal Ponzi scheme that has scammed thousands of people across India and the world. 

'That Rs 20 lakh was my life's savings. It's all gone now,' Afreen says, 'I was introduced to Heera Gold by a trusted friend, who had invested Rs 1 lakh and was earning Rs 3,000 a month.'

'I went to the Heera Gold office in Hyderabad. They painted a picture of a multinational company with investors and companies across the world. I enquired with people and they all had only positive things to say about Heera Gold.'

The company tapped into the community of Islamic clerics, giving them small donations in exchange for them advocating their followers to invest. It promised a 36% partnership return on investments, whereas banks could give a return of at most 13% per annum.

Afreen’s elder brother who resides in UAE invested Rs 24 lakh, and many other relatives also made hefty investments in the halal Ponzi scheme. 

But the last time that investors got any dividends, for their investments into Heera Gold and 15 other companies that operate under Heera Gold, was in June 2018.

The Enforcement Directorate pegs the scam to be worth Rs 3,000 crore, and the number of Heera Gold victims to be around 1.72 lakh.

The Hyderabad Central Crime Station (CCS) pegs the scam to be over Rs 5,460 crore and called the 15 companies floated by the Heera Gold as shell companies.

However, those who are fighting the group in court and are offering legal support to the victims say the scam is worth much more, and that the number of victims could be well over a couple of lakhs in India alone. 

What attracted investors from the Muslim community to the Heera Gold was the promise of halal investments, a form of non-interest-paying investments conforming to the Islamic Sharia laws.

Unlike fixed bank interest rates, which are considered to be anti-Islam, halal schemes sell their plans as a form of partnership business with the promise of high returns.

1 Lakh = 100,000 and 1 Crore = 10,000,000 --- 1 Lakh INR (Indian rupees) = £1136.24 GBP at the time of writing.

Editor's comment - A Ponzi scheme is one that promises high returns to investors, but which does not have a legitimate business backing. Old investors are paid using the money generated from new investors, and the scheme can only last as long as there are more and more investors willing to put in their money. A Muslim Halal Ponzi scheme - who woulda thunk it? 

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