The terms and conditions of the agreements that I Monetary Advisory (IMA) investors signed were heavily tilted towards the company, investigators have found.
Not only did the agreements allow the investments to be fraudulently manipulated, but they also let the beleaguered company redirect the funds and invest them as per its whims.
The investment agreements reviewed by DH show that instead of specifying where it would make the investments, the company claimed to invest in the “Indian bullion market” and promised returns based on “market volatility”.
It added vague clauses such as returns “can be in the form of profit or loss which would be subject to market risk and no lock-in periods and have assured returns based on market volatility.”
While the agreement assured the “safety and security of the invested amount”, it sprang another surprise. “In the case of deficit in the principal amount, I Monetary Advisory continues business until (the) principal (amount is) recovered, (the) recovery period is set for (a) three-month time frame.”
According to sources, the document provided full rights of any investment made to the company and allowed IMA to invest as it deemed fit. “Not only did the contract not guarantee any returns on investment, but it also did not assure the safety of the principal amount,” the sources said.
While the terms and conditions of the agreement were written under the IMA letterhead, deposit slips were issued under IMA Credit Cooperative Society. This, unbeknown to most investors, made it clear that the two were separate entities.
The purpose of such demarcation was to fraudulently manipulate the invested funds through the cooperative society. “This allowed IMA to evade tax and seek exemptions from financial regulations. The company founder might have planned to rely on this fine print in case IMA suffered losses,” the sources added.