The Central Bureau of Investigation has booked five Karnataka police personnel including two senior Indian Police Service (IPS) officers - Hemanth Nimbalkar and Ajay Hilori - in connection with the Rs 4,000 crore IMA scam in which gullible investors were allegedly cheated in the name of Islamic banking.

The move came after the CBI received sanction from the Karnataka government to proceed with the probe into the alleged role of the two IPS officers.

Besides the two IPS officers, the CBI has also named Gowri Shankar (then sub-inspector with Karnataka Police), EB Sridhara (then then DSP of CID, Karnataka Police) and M Ramesh (then Inspector with Karnataka police), reports India Today.

According to the report, investigations conducted so far have revealed alleged deliberate inaction and favours to IMA on part of these officers.

One of the two IPS officers, Hemanth Nimbalkar had reportedly given the clean chit to the controversial IMA group during a probe, which was initiated after Reserve Bank of India (RBI) sounded a warning against the functioning of IMA.

Following the warning by RBI, the State police had directed the CID to conduct a probe in the matter and submit the report. However, the probe team headed by Nimbalkar gave a clean chit to IMA.

The police report had stated that based on the documents and evidences collected, IMA and its group entities were not financial institutions, and its investors had invested accordingly.

The report had also stated that the investigation could not find any concrete evidence that IMA had cheated investors by promising lucrative returns. Even the balance sheet of Mansoor Khan and Income Tax returns of the company was verified and no irregularities were found, Nimbalkar had stated in his report, as reported by Deccan Chronicle.