Karnataka government in damage control mode; meet with RBI officials next week to plug gaps

BENGALURU: Under criticism for having ignored multiple Reserve Bank of India (RBI) alerts about the I Monetary Advisory (IMA) scam, the state government has got into damage control mode now. A meeting with RBI officials has been convened next week at the behest of home minister MB Patil.
“We want to fix responsibility on each and every authority. Before doing this, we need to get a proper assessment of the system and figure out gaps that need to be plugged and I hope, the meeting will be helpful in doing so,” Patil said.
Patil said the meeting convened by the government will be attended by various agencies and departments which are now working in silos when it comes to dealing with Ponzi schemes.Officials from the departments of revenue, home, finance and others will take inputs from RBI officials. “The objective is to create a common administrative platform to deal with such cases,” Patil added.
Also, the state-level coordination committee (SLCC)—a joint forum to facilitate information sharing among regulators, including the RBI and Securities and Exchange Board of India (SEBI)—headed by the chief secretary will meet separately to discuss the IMA case.
ACs’ powers withdrawn in Jan
Although waking up a little late, the government is mulling restoring powers to assistant commissioners (ACs) of the revenue department to confiscate assets of Ponzi firms to tackle such more efficiently.
The government had withdrawn the powers given to ACs to seize properties of Ponzi companies in January this year. Just two months before that, on November 11, 2018, a public notice was issued to seize movable and immovable properties belonging to IMA Private Limited and sixteen of its associated firms.
“The powers were withdrawn following the RBI instruction that action against such companies should be on case by case basis. Now, a process has been initiated to restore the powers of the competitive authority, particularly in the case of IMA Group,” said Rajkumar Khatri, principal secretary to the revenue department.
LC Nagaraj, revenue assistant commissioner of Bengaluru north sub-division, is the competent authority and he told TOI that he’s waiting for orders. However, Nagaraj has to wait for the special investigation team (SIT) to complete its probe in the IMA case and identify its properties to be seized.
“This rigmarole could have been avoided had the government allowed the ACs to confiscate properties in November 2018,” a government official said.
According to an estimate, Mohammad Mansoor Khan, founder-owner of IMA Group, has left behind assets close to Rs 500 crore and fled the country. The assets include 1,900kg gold jewellery, 18.64kg platinum and land.
Officials, however, said they were sceptical about the outcome of the government’s efforts given that several politicians and bureaucrats are soft-peddling the issue. Patil, however, said the government is sincere in providing justice to the investors. “We admit that there were some loopholes in the system. But, now we want to plug them,” he said.