Business

Morgenall Scam: “Unfair to Blame Us, We Are Victims Ourselves”, Says IslamWorld’s Owner

Bengaluru: Mahatab Amjad, the owner of IslamWorld bookstore says it is unfair to drag his name in the Morgenall scam, which is believed to have defrauded investors to the tune of hundreds of crores in the city.

He told The Cognate that investors have been sharing his photos on WhatsApp groups and social media, accusing him of being an alleged associate of prime accused Irfan Pasha and his wife Fathima Maqdooma, and are demanding an explanation from him for the money they have lost in the scam.

“I or anyone from IslamWorld, have never asked anyone to invest their money in Morgenall. It’s unfair for people to blame IslamWorld for their losses,” says Amjad.

Morgenall, a recruitment and job consultancy company, with offices in the Middle East had recently started a co-operative banking society, through which it is alleged to have amassed people of vast sums of money by specifically targeting the city’s Muslim community in the name of halal investment. The company lured investors with monthly 10–20% fixed returns and even promised to double the amount within a few months.

The company’s scam came to light on 24th September, when investors of the Bengaluru-based firm found its office locked and phone numbers not operational. When panicked investors, who have not been paid returns for several months, gathered in front of the company’s CEO Irfan Pasha’s house, they found the house was locked too, making them realize that the CEO had cheated them of their money, and was absconding along with his family members.

“When the news of Morgenall’s office being locked reached people, they started questioning me about Irfan and his wife’s whereabouts,” Amjad says.

“I have no clue, where they are. I run a bookstore, which Irfan Pasha proposed to expand with better and bigger premises. He never discussed anything about the co-operative society or his other businesses with me, let alone about running away with people’s money”.

According to Amjad, Irfan Pasha approached him in 2017, with a proposal to help him expand his bookstore into a ‘Global Halal Megastore’.

“I started IslamWorld in 2010 as a semi-commercial venture. I have been facing some cash flow issues for a couple of years, which I had discussed with few friends of mine”.

Through a mutual friend, Pasha approached Amjad and proposed that he sell his bookstore to them and become a unit of Morgenall Management Consultants Private Limited (the original recruitment company), which according to Amjad was the only Morgenall company in existence at the time.

Amjad says he liked the proposal and did not have any issues with branding IslamWorld with Morgenall. “That’s when the phrase ‘a unit of Morgenall’ got tagged with IslamWorld, he says.

According to him, Morgenall later formed another company called Morgenall Publications Private Limited and made him a minority shareholder with no financial or management control rights, “effectively making him an employee.”

“I had no issues working as an employee, as long as IslamWorld was saved from the financial crunch it was facing. However, things started falling apart between me and Irfan and his wife, when they refused to sign the sale agreement and even threatened to convert the initial sale consideration into a loan,” he says.

According to him, things got worse when Morgenall announced its plan to start an investment company and a co-operative society, which would take investments from the public, with a promise of returning fixed profit rates.

“I have never believed in such schemes, and I was very uncomfortable with IslamWorld’s name being associated with Morgenall after that. I had agreed to get associated with Morgenall because it was an HR recruitment company. If I had known their intention was to start an investment company, I would have never associated with them”.

According to Amjad, he submitted his resignation as a director from Morgenall Publications Private Limited on February 16th, 2018, which was accepted by the other directors.

Company details of Morgenall Publications Private Limited, as accessed on Ministry of Corporate Affairs’ (MCA) website. Mahatab Amjad says he submitted his resignation as the company’s director on 16th February 2018.

“Morgenall rented a large store, under brand IslamWorld, where they spent a large sum of amount for interiors alone”. According to him, many of the vendors, who were promised payments, are yet to be compensated, and even the rent of the building has not been paid by the company for the past couple of months.

Amjad even claims Irfan Pasha took books worth several lakhs from IslamWorld and distributed them for free to investors of Morgenall, for which he is yet to be compensated.

When The Cognate questioned Amjad, why he didn’t caution investors when he did not believe in such schemes himself and even resigned from the company, he replied that at the time, he was held up with solving the sale agreement matter between IslamWorld and Morgenall, and several other issues, including salaries for the staff.

“I was only involved with matters related to my bookstore. I did not know, how the investment company or the co-operative society was being operated and was not privy to the internal activities of the society. I wanted to be dissociated from Mogenall because of my personal belief which made me feel uncomfortable with such investment schemes in general. It never occurred to me that Irfan will abscond, and investors will be duped.”

“Morgenall used the trust and goodwill that IslamWorld had built over the years, and solicited investments from the public by misusing our name. We agreed to a tie-up with Morgenall as an HR company, and not with an investment company.”

Amjad says, contrary to the allegations made against him, IslamWorld is now under debt amounting to several lakhs.

“Sharing my pictures on social media and making baseless allegations against me, is not going to solve anyone’s issue. I am a victim of Morgenall too, with debts and liabilities on my head. If anyone wants any clarification, they can come and talk to me directly. I am ready to talk to people if they are ready to listen to me,” says Amjad.

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