Sangeetha Kandavel
CHENNAI: In Tamil Nadu, a highly literate and industrialised
state with a propensity to fall for ponzi schemes, one more investment scam
seems to be brewing. This time it centres around the emu, a large, flightless bird native
to Australia
Across the southern
state, indications are that there is a steady build-up of what is essentially circular trading of
emus, something that is usually a precursor to an eventual collapse.
Advertisements on television, Internet and pamphlets are touting the bird as
the ultimate in investment.
Among those who fell
for the spiel is Arjun, a 30-year-old software engineer from Chennai who bought
10 pairs of chicks investing Rs 2 lakh. He got his money back in two years, but
now says there is something fishy about the whole scheme. "If everyone is
selling the bird not to the end consumer but to people who are getting into
farming, it doesn't sound good," he says.
Investment
schemes for emus look remarkably similar to the ponzi
rackets that have operated in the past. For an initial investment of, say, Rs 2
lakh for 20 pairs of chicks, an investor is promised total income of Rs 6.5
lakh in five years-essentially a tripleyour-money scheme. All an investor is
supposed to do is return the 20 pairs to the company promoting the scheme every
year and take a new set.
Emu farming is
supposed to have debuted in India
in the mid-1990s after emu slaughtering was banned in its home in Australia Gujarat .
It is in the past two
years that the hype has grown. Afarm owner near the hill station of Kodaikanal
boasted that he has sold over 1.5 lakh emus so far. No order below 25 pairs of
chicks is worth his while and payment has to be upfront.
Doubts Over Mkt's Existence
Among those
contributing to the buzz is Susi Emu Farms in Perundurai, near Erode, which
calls itself one of the largest emu farms in India
For Senthil, who
relishes quick profits, emus are just what he was looking for. Recently, he
paid Rs 1.2 lakh for five pairs of chicks from a farm just outside Chennai. In
two years, he believes, each emu will be worth Rs 45,000.
Emus can grow to be as
tall as humans and weigh up to 60 kg. Related to ostriches, they can live for
40 years and are fertile for half that period. Those peddling emus say it is a
golden goose-its meat, eggs, feathers, toenails, skin and even oil are all
valuable.
While software
engineers and farmers alike are being lured to emu schemes, they are not asking
if there is a real market for emu products. Such concerns have arisen once in a
while but formal complaints have not been made. VK Shanmugam, the collector of
Erode district, says the emu business is a matter of "serious
concern" but since there are no complaints, no action can be taken.
Shanmugam says he is also intrigued by the
fact that he doesn't see any of the birds though people seem to be investing in
them. "I hear that people are depositing money but are not able to get
receipts for that," he says.
The administration
recently had a meeting with top police officials about the emu problem. Tamil
Nadu has a rich history of ponzi schemes. Among the more notable ones is the
collapse in 1998 of the Anubhav group which duped investors who put money in a
teak plantation scheme of around Rs 400 crore.
Last year, a PTI
report said the Maharashtra government ordered
a CID inquiry into a likely Rs 200-crore emu farming scam in Nashik district.
The controversial
scheme, run by a private company, involved a promise to triple investment in 45
days. Farm owners in Tamil Nadu estimate the number of emus in the state at
around five lakh, or one bird for every 130 people in Tamil Nadu. Sceptics such
as Shanmugam, however, don't buy that number.
V Rajapandi, the
general secretary of the Tamil Nadu Emu Association, said to be registered
under the Societies Act and having 300 members, defends his business.
He
says emu farming is a genuine business "if you do it in the right
manner." "It has a huge market. Just because a handful of people say
so, you cannot say the business is a ponzi scheme," he adds.
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