How to lose your friends

Sibtul Shah, aka Double Shah, was a teacher tired of being poor; decided to get rich by scamming friends and family

Sibtul Shah, more generally known as Double Shah, was a teacher who got tired of being poor and instead decided to get rich by scamming his friends and family. He started off by offering to double their money within 15 days. Like the original Charlie Ponzi, he paid back his ‘investors’ by borrowing more from others. And like all subsequent Ponzi schemes, his scheme blew up as well.

After a few happy years, he ran out of people to fleece and stopped paying back. Not surprisingly, his investors became very upset. Eventually, he was arrested and handed over to the NAB. Unfortunately, a lot of people lost a lot of money along the way.

The sad part is that all of us know a ‘Double Shah’. Some of them may wind up becoming embroiled in major scandals. But there are also lesser characters who love to take people for a financial ride.

A relative of mine lent someone a large sum of money. The borrower was in a serious crisis and my relative was approached for help. The commitment was that the money would be returned in “a month or two”. Now, almost a year later, the money is nowhere in sight and the relationship with the borrower is strained and very unpleasant. Like the Double Shah investors, my relative is stuck.

What is important to realise here is that the fault is not just of the borrower. The lender is as much at fault. When you decide to lend someone money you should keep in mind that there is a huge possibility that the money may just disappear for good. My grandmother used to say that never lend anyone money. If you really want to help, then give what you can part with for good. If someone is borrowing, then it’s obviously not money they have and therefore may not have later either.

A friend’s mother passed away a few years ago. At the qul, I overheard a group of women gossiping. Turns out the deceased had a bit of a borrowing problem and she owed people an upwards of Rs1 crore. I was stunned. The family went through the grinder trying to pay off all her debts. The biggest problem was there was no way of deciphering who was actually owed money and who wasn’t.

Borrowing money can become an addiction. Once you start, it’s very difficult to stop. You keep asking for larger and larger sums. Along with the increasing amounts, the repayment period tends to get extended as well. Eventually you end up so deep in debt that it becomes impossible to pay off those debts. That, in turn, leads to legal issues and people getting very angry.

I understand that one feels the desire to help people in need, but sometimes we are actually facilitating people who have a problem. There is always going to be a major crisis in someone’s life. That crisis may or may not exist, but why is it your problem? And if you feel so responsible, then why not just gift whatever you plan to lend? However, permanently parting with hard-earned money or even an inheritance is not easy.

There are also times when one gets bullied into handing over money. It could be social pressure or serious illness or even the possibility of someone losing the roof over their head. You get stuck in the dilemma of ‘what if I say no and something terrible happens?’ It’s hard to say no in some cases. But it is also important to recognise people who have a real problem and are addicted to borrowing.

How does one recognise a ‘Double Shah’? Unfortunately, there is no hard and fast rule or formula. But there are some telltale signs. First and foremost, there is normally a reputation that precedes such people. Keep your eyes and ears open. Second, make sure you are not being set up. Just because somebody has returned small sums in the past doesn’t mean it’s a good idea to give them a larger amount in the future. Third, if someone offers huge returns, run away. Remember, if it sounds too good to be true, it probably is. The rule of thumb is that people who don’t usually borrow money, never borrow money: they just learn to live within their means. When it comes to lending or borrowing, there is rarely ‘just the one time’.

Ultimately, it is up to you, which way you go when someone asks you for money. My view is that if you have the capacity, then give the money as a gift. If not, then don’t get into this whole lending mess. Sometimes you just need to be cruel to be kind, both to yourself and your friend in need. 

Published in The Express Tribune, October 12^th, 2015.

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