Ahmedabad-based company offers you a 10% per month return on your investments!

Believe it or not, investing a mere Rs10,000 can get you Rs12,000 in a year, that is a  return of 120% per annum.  It sounds impossible! But Ahmedabad-based Imtsons Investments Ltd, a stock broking, commodity broking and real estate firm, is the one offering the impossible. The company promises a return of 10% per month or 120% per annum.  Amazing, isn't it? The managing director of Imtsons Investments Ltd, Imtiyaz Saiyed, spoke to
DNA  about his firm and shareholders which according to him stands at 16,000. He says the shareholders have been benefiting from his scheme for few years now. Excerpts:

Is it practically possible to give a return of 10% per month?
Yes, very much.

How do you manage it?
We take money from people and invest in real estate and Futures & Options in Nifty through which we manage to make huge profits. We have residential and commercial schemes in Khambat, Palej near Bharuch, Vadodara and Surendranagar. Of the total raised capital, we invest 52% in real estate and 48% in equity. With both the investment avenues, we annually, manage to make huge profit and give 120% per annum to our investors.

But how do you operate?
Through distributors and agents, we take money from investors. Once the investment is made we issue the investors share certificates and also sell them shares of Imtsons Investment Ltd. The shares have a face value of Rs10 each. The share prices have remained the same since the company was formed. We take this investment as capital for our company which is again invested in real estate and stock market. We make huge profits from both and the same is shared as dividend with our shareholders. The dividend is 120% per annum of their investment. But we pay this dividend to our shareholders every month, at rate of 10% per month.

In 2009, the stock market grew at around 80% while in 2010, it was less than 20%. In 2008 it crashed. Despite the high volatility, how could you manage to give a flat 120% return to investors?
We get special tips from certain stock market experts. The tips and our own research help us make huge profits. Simultaneously, we have also invested in real estate. Real estate is a market in which price will never come to zero. For us it is a safe investment avenue.

How many shareholders do you have? Of the total capital, how much is promoters' holding?
Since launch of the scheme, we have around 16,000 shareholders. After selling shares of the company, today the promoters (he and his family) hold a stake of around 8%. Rest 92% have been sold to shareholders. Today, the subscribed capital of the company is Rs100 crore while paid up capital is Rs60 crore. We have set a target of converting paid up capital into fully paid up capital of Rs100 crore by end of March 2011.

Do any of the regulators - RBI or Sebi - have a role in this?
Not really. Imtsons Investment Ltd is a public limited company since February 11, 2010. We take money from people in the form of capital and not as investment. In return, we don't pay interest but dividends. So, none of the regulator have a role to play in our operations. But, in the future, we have plans to start microfinance. After that, RBI will regulate the company.

Do other companies which offer 15% or 20% returns every month have a similar model?
I cannot speak of other companies. But in case of Imtsons Investments, we are a registered entity. Each and every transaction of ours is done through cheques. We strictly follow KYC norms, which mean we don't accept money from investors without a PAN card and address proof. We also keep track of our investors.

But why are such schemes popular only in Muslim ghettos?
Our distributors and agents are usually Muslims and they get fund from other Muslims. But this does not mean that we only have Muslim investors. Even Hindus have invested in our schemes.

How do you address the question of 'ethical investment' as under Muslim norms?
We do not invest in companies dealing with alcohol, arms, tobacco etc, which have been ordained 'haraam' as per Muslim norms. Investing in the stock market per se is allowed. The concept of sheer interest does not apply here as we put money in companies that do business.