When the first flock of emus — flightless birds native to Australia — landed at Perundurai in Tamil Nadu’s Erode district in 2006, they drew the attention of only curious onlookers. Then they drew the attention of investors, enabling firms and businessmen offering schemes on the birds to rake in huge money. Six years on, the emus and the investors have been left in the lurch and the businessmen have allegedly taken flight with the invested money as emu contract farming joined the list of dubious investment schemes after a few years of roaring business.
Investors fleeced
Perundurai, the hub of emu farms, is now crowded with anguished investors who swallowed the bait of big returns. A conservative estimate by district officials points to a scam worth Rs. 300 crore. But traders in the poultry business claim over Rs. 500 crore might have been lost in this business. The police have said Susi Emu Farms India Private Limited might have swindled investors of around Rs. 200 crore; most of these are from Tamil Nadu.
Promised staggering financial returns, more than 20,000 people invested in these firms. “People thought only about the financial returns. They did not think where this would lead them to,” said Lower Bhavani Farmers’ Association president S. Nallasamy.
In 2006, M.S. Guru, hailing from Perundurai, founded Susi Emu Farms and introduced a buy-back scheme that promised lucrative returns on investment in contract emu farming. For an initial investment of Rs. 1.5 lakh, he promised a return of Rs. 3.34 lakhs within two years. Under the scheme, the company provided investors three pairs of chicks on the payment of Rs. 1.5 lakh as caution deposit. It also provided the infrastructure to rear the birds and offered Rs. 6,000 a month for the maintenance of the birds, besides a yearly bonus of Rs. 20,000. Thus, the investor was offered around Rs. 1.44 lakh. As per the scheme, the company would take back the birds after two years and return the deposit too. When word got out that Susi Emu Farms made prompt payments, the investments poured in; in no time the company’s presence spread all over Tamil Nadu.
Soon after, the firm introduced a VIP scheme, taking advantage of the lack of awareness among people about the birds. Under this scheme, the investor had to deposit Rs. 1.5 lakh. But unlike the regular scheme, the firms promised to rear the chicks and pay the investors Rs. 7,000 a month and an annual bonus of Rs. 20,000.
Quick profits lured investors like S. Kasinathan of Pallathur in Sivaganga District, who put Rs. 15 lakh in the regular scheme. “I was misled by advertisements. I trusted the firm as it was doing business for seven years,” he said.
R. Jayammal of Tiruchengode invested Rs. 4.5 lakh in the VIP scheme six months ago. “My neighbours and relatives invested and got monthly returns. So I too invested all my savings,” she said.
Endorsed by popular film personalities, it expanded business to Andhra Pradesh, Karnataka and Kerala. Mr. Guru even opened a chain of restaurants in Bangalore, New Delhi, Puducherry and Erode, among other places, inviting State and Central Ministers and famous personalities for inaugurations.
Mushrooming of emu firms
The success of Mr. Guru’s business model led to the mushrooming of emu firms, which advertised heavily in the Tamil media. Some even promised a return of Rs. 2 lakh a month for an investment of Rs. 10 lakh.
Oblivious to the fact that there are no processing facilities for products derived from emus, the investors bought these firms’s claims that they exported emu meat and that everything from an emu was marketable. Many firms reportedly even engaged in trading of birds among themselves instead of marketing the emu meat, oil and skin (for leather).
Sensing that something was wrong, the Erode district administration issued repeated warnings asking people not to fall for the tempting offers from these firms. “We have warned the investors on several occasions. But, lured by the get-rich-quick schemes, they failed to see the warning signs,” Collector V.K. Shanmugam said.
The bubble bursts
The bubble burst when Susi Emu Farms failed to pay the monthly maintenance fee to the investors. After waiting for sometime, the investors made a beeline for the firm’s office in Perundurai.
On August 6, Mr. Guru and his entire family disappeared. Others in the business followed suit, abandoning scores of investors and the birds.
The police have registered cases against Mr. Guru and seven others under Section 120-B (conspiracy) and 420 (cheating) of the Indian Penal Code and formed three teams to nab the culprits. About 4,000 investors from across the State have registered their complaints against these firms so far, the police said.
This is not the first time Mr. Guru has been caught in a controversy. Earlier, he was arrested for misusing the former President, A.P.J. Abdul Kalam’s name in promotional material.
Keywords: emu farming, Tamil Nadu emu farms, Susi Emu Farms, Perundurai
To begin with I agree with everybody that the such firms must be punished. But let us not forget that the fuel for their growth is our greed.
The desire to multiply money at better terms is always dangerous. We have seen umpteen cases before. As someone mentioned above teak plantations is an example.
Blaming the media is of no help. They cannot check the veracity of each and every ad. They go by the guidelines laid down by respective media councils.
It is our responsibility to ensure that our hard earned money does not go in wrong hands.
We should be not carried away by promises of quick and better returns on investment. Rather think of safer alternatives which may give less interest but protects your investment.
The duping and cheating hundreds of investors by promoters of who promised high returns from emu farming is yet another poncy scheme. It is reported that the investors have lost more than Rs.1000 crores especially in Tmilnadu. Many people in Andra Pradesh, Karnataka and Maharashtra have also. Although greed is the main reason for falling victim to such poncy schemes. The fraudsters have made use of the media particularly TV for reaching the the deprived persons. What is intriguing is that how these people have applied reason in judging the economics emu farming. The TV Channels which should be reasonable in accepting advertisements from such fancy schemes. Similarly, thousands of people have been duped by realtors by selling unapproved layouts all over the country. In this case also media advertisement, especially TV, is the main reason attracting the people.At least hereafter the people should be vigilant and the media should be reasonably sensitive and selective.
In what way is this scam different from others in which "promoters" swindle investors through fraudulent operations with false promises of huge profits? When I saw the title of the article, I was looking for some basic fault in emu-farming itself that rendered it unsuitable for India. The article does not discuss that aspect. Doordarshan channel, Podigai (Tamil), carried several episodes praising emu farming. I thought they were produced by experts, and, therefore, the question still remains, is emu farming in India a commercially profitable proposition.
What to say about the greed of the society, I myself was approached by these Multi Level Marketing agents of Emu Farms. It has found the less learned rural indian as an victim for their ponzi scheme. They give away 15 chicks with a shed for 1.5 lac rupees investment. Little the farmer must have some sense that a shed costs around 4000 rupees 15 emu chicks will cost him only 750 Rs if he is so serious about the business. 1000 Rs per month for their ponzi marketing expansion.Moreover the silence of the govt makes us more sick. These people were advertising in Mainstream media, FM radio and print media for their cheating schemes. The govt should also take action against media services who got their advertisements revenue for cheating the public. I did not get cheated runaway finance companies were more of a lesson to us but i feel extremely sorry for my neighbors and relatives who lost their hard earned money on this stupid ponzi schemes.
Driven by greed, heinous business over animals and other creatures has reached maximum intolerable level. In this case, such loss is inevitable...
if human being are not mercy over other creatures then how nature can be expected to be clam over human beings.
1. Australia, the homeland of EMU, has advised there is no proper commercial market for emu oil/skin or meat.
2. A similar situation happened in USA in 1997 and lot of farmers just let go their emus as they were unable to feed and it was costing them more to sell the meat.
3. Maharashtra government has ordered a CID enquiry in 2011, after a Nashkik based company was involved in a similar problem.
Sad that these facts had not reached the poor farmers and they are paying the price. I feel the officials could have done more to advise the people on the dangerous nature of this investment.
All news papers, magazines and TV Channels which accepted advertisements from these Emu farms should be punished, in the greed for money they accepted advertisements without any evidence or supports proofs from the the Government or Banking Agencies for tall claims these swindlers were talking about, think about this had the papers, magazines and TV Channels acted responsibily we could averted this disaster, as for the stupid investors, only God can save them, they never ever seemed to learn.
In Maharashtra too, hundreds of investors have been duped by promoters of who promised high returns from emu farming. Some fifteen–twenty years back teak tree plantations were a craze of the day. Investors in these plantation companies too lost money. It appears that every time such dubious schemes are promoted, a new group of promoters are able to attract investors by promising them high (and unrealistic) returns on their investments. And every time it is the uninformed and gullible investors who are robbed of their money. Promoters of such schemes are rarely punished. Question is whether investors too are guilty. Secondly, are there any government agencies who are expected to find out the some basic facts of viability of such schemes and warn the public of the danger of investing in such schemes?
Good reasoning for the failure of these EMU farms!! Now ,you can do the
affected a lot of favour ,by following up with an article ,which states
in what way people can set up facilities to utilise the "deliverables"
of an EMU !! The fact is that the venture seems to be a failure because
the Supply Chain is not closed yet !! Find avenues about how to complete
it -a good chance for budding entrepreneurs to take a dip !!
Sometimes ,when we are in a dead end in the dark ,we might actually be
standing against the door but not knocking on it !! Knock Knock !!
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