Modaraba scheme: NAB to appeal against bail for fraudulent mufti
Mufti Ihsanul Haq ran a Rs8.2 billion Ponzi scheme that defrauded over 10,000 people
PHOTO: National Accountability Bureau
ISLAMABAD:
The government’s anti-corruption watchdog has decided to file an appeal in Supreme Court of Pakistan against a provincial court’s decision to grant bail to Mufti Ishanul Haq, who is accused of defrauding more than 10,000 people of Rs8.2 billion by claiming to run a modaraba.
Ihsanul Haq is accused of falsely claiming to run a Modaraba, an Islamic investment company, and taking in a total of Rs8.2 billion from more than 10,000 people and running away with their money rather than investing the proceeds as promised. The National Accountability Bureau’s Rawalpindi office arrested him two years ago, in September 2013, and has filed four references against him, but the Lahore High Court has granted him bail, said Muhammad Hussain, head of the financial crimes investigation unit of NAB at a meeting of the Senate Finance Committee. NAB has taken up the issue with the prosecutor general and would file an appeal in the apex court against the LHC’s decision, said Hussain.
In recent years, many religious leaders are exploiting people who want high returns on their investments but do not want to do business with licenced commercial banks and financial institutions for religious reasons. These religious leaders claim to offer Islamic alternatives to the financial system. They often call their schemes modarabas, an Islamic investment vehicle. While many legitimate financial institutions also offer modarabas, these muftis are not qualified investment professionals and simply run away with the money rather than investing it.
Meanwhile, many religious people have been reposing their trust in muftis and their claims. Some women are reported to have sold their jewelry while other people have sold their properties and ailing businesses to enjoy the promised gains of Islamic investment.
“Mosques are becoming places for financial crimes and many mosques are running fake modaraba companies,” claimed Hussain. He said the average investment by these people was in the range of Rs10,000 to as high as Rs400 million. “Mufti Haq is not an isolated case. These muftis first declare doing business with banks un-Islamic and then lure people into giving them their savings.”
Published in The Express Tribune, September 18th, 2015.
The government’s anti-corruption watchdog has decided to file an appeal in Supreme Court of Pakistan against a provincial court’s decision to grant bail to Mufti Ishanul Haq, who is accused of defrauding more than 10,000 people of Rs8.2 billion by claiming to run a modaraba.
Ihsanul Haq is accused of falsely claiming to run a Modaraba, an Islamic investment company, and taking in a total of Rs8.2 billion from more than 10,000 people and running away with their money rather than investing the proceeds as promised. The National Accountability Bureau’s Rawalpindi office arrested him two years ago, in September 2013, and has filed four references against him, but the Lahore High Court has granted him bail, said Muhammad Hussain, head of the financial crimes investigation unit of NAB at a meeting of the Senate Finance Committee. NAB has taken up the issue with the prosecutor general and would file an appeal in the apex court against the LHC’s decision, said Hussain.
In recent years, many religious leaders are exploiting people who want high returns on their investments but do not want to do business with licenced commercial banks and financial institutions for religious reasons. These religious leaders claim to offer Islamic alternatives to the financial system. They often call their schemes modarabas, an Islamic investment vehicle. While many legitimate financial institutions also offer modarabas, these muftis are not qualified investment professionals and simply run away with the money rather than investing it.
Meanwhile, many religious people have been reposing their trust in muftis and their claims. Some women are reported to have sold their jewelry while other people have sold their properties and ailing businesses to enjoy the promised gains of Islamic investment.
“Mosques are becoming places for financial crimes and many mosques are running fake modaraba companies,” claimed Hussain. He said the average investment by these people was in the range of Rs10,000 to as high as Rs400 million. “Mufti Haq is not an isolated case. These muftis first declare doing business with banks un-Islamic and then lure people into giving them their savings.”
Published in The Express Tribune, September 18th, 2015.