In Tamil Nadu, a highly literate and industrialized 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 and reputed to have as many uses as the wonder drug aspirin.

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 triple your-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.
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Emu farming is supposed to have debuted in India in the mid-1990s after emu slaughtering was
banned in its home in Australia. Now, those in the business say there are 3,000 farms in the country,
largely in Tamil Nadu, Punjab, Maharashtra, Kerala and 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. Its sales pitch is that “it fulfils dreams of people
who are in search of projects providing quick profits on investments in this competitive world”.

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.

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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.

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.

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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.

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EMU’s SCHEMES

Scheme –1 Three years scheme :

In this scheme, an individual / farmer deposits Rs.1,50,000/-, the company will supply six EMU
CHICKS and will construct the sheds for the EMU CHICKS and also provide feeds and medicines
to maintain the chicks. The company also gives Rs.6,000/- per month for 36 months to the
individual. Every year, the company will pay bonus of Rs.20,000/-. After three years, the company
will refund the principal amount of Rs.1,50,000/- and the birds will be returned to the company. It
was called as one unit. The rate of interest in this scheme comes to 61.33% approx.

Scheme -2 VIP scheme :

In this scheme, an individual deposits Rs.1,50,000/-, the company will pay Rs.7,000/- per month
for 24 months. In this scheme, EMU chicks are maintained by the company itself. Every year, the
company will pay bonus of Rs.30,000/-. After two years, the company will refund the principal
amount of Rs.1,50,000/- It was called as one unit. The rate of interest in this scheme comes to 76%
approx.

KURINJI CHICKEN POULTRY & CATTLE FARMS

Scheme – 1 Nattu Kozhi growth Scheme:

In this scheme, an individual/farmer deposits Rs. 75,000/-, the company will supply 30 days old 150
Country CHICKEN chicks four times per year and will construct the sheds for the CHICKS and also
provide feeds and medicines to maintain the chicks. The birds will be taken back by the company
once in three months. The company gives Rs.2,500/- per week for 3 / 5 years to the individual.
Every year, the company will pay bonus of 12%. After 3 / 5 years, the company will refund the
principal amount of Rs. 75,000/- + 1% p.a. interest to the individual/Farmer. The rate of interest in
this scheme comes to 186% approx.

Scheme – 2 Goat Growth Scheme:-

In this scheme, an individual/farmer deposits Rs. 1,25,000/-, the company will supply 90 days old
25 lambs 2 times per year and will construct the sheds for the lambs and also provide feeds and
medicines to maintain the lambs. The goats will be taken back by the company once in six
months. The company gives Rs.4,000/- per week for 3 / 5 years to the individual. Every year, the
company will pay bonus at the rate of 12%. After three years, the company will refund the principal
amount of Rs.1,25,000/- + 1% p.a. interest to the individual/Farmer. The rate of interest in this
scheme comes to 179% approx.

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NANDU COPRA

Scheme – 1 COPRA Scheme:

In this scheme, an individual/farmer deposits Rs. 25,000/-, the company will supply 1000
coconuts per week for three years. The company will collect the dried coconuts and coconut shells
every week and supply fresh coconuts. The company will give Rs.1,000/- per week for 3 years to
the individual. After three years, the company will refund the principal amount of Rs. 25,000/- +
1% p.a. interest to the individual/Farmer. It was called as one unit. The rate of interest in this
scheme comes to 208% approx.

Scheme – 2 COPRA Scheme:

In this scheme, an individual/farmer deposits Rs.25,000/-, the company will allot 1000 coconuts
per week for three years. The company also keeps the dried coconuts and shells with itself. The
company will give Rs.500/- per week for 3 years to the individual. After three years, the company
will refund the principal amount of Rs.25,000/- + 1% p.a. interest to the individual/Farmer. It was
called as one unit. The rate of interest in this scheme comes to 104% approx.

SRI KRISHNA COPRA PRODUCTS

Scheme – 1 COPRA Scheme:

In this scheme, an individual/farmer deposits Rs.50,000/-, the company will supply 1000
coconuts per week for three years. The company will collect the dried coconuts and coconut shells
every week and supply fresh coconuts. The company will give Rs.2,000/- per week for 3 / 5 years to
the individual. Every year, the company will pay bonus of 12%. After 3 / 5 years, the company
will refund the principal amount of Rs.50,000/- + 1% p.a. interest to the individual/Farmer. It was
called as one unit. The rate of interest in this scheme comes to 221%.

From the perusal of the contents of the scheme, it is seen that the accused had malafide intention
right from the beginning, floated various schemes camouflaging the scheme as genuine business
schemes to cheat the innocent public by alluring them with unrealistically high rate of return ranging
from 61% to 221% which were impossible to be paid by them as they did not have any genuine
business to earn such high income to pay such high rates of return.

Most of the EMU farms, Poultry Farms and Copra Farms are not properly registered. They have
not accounted for the money collected from the public and also not maintained proper books of
accounts. They have not obtained license from the Reserve Bank of India for collecting deposits
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from the public and also not complied with the provisions of the Companies Act, 1956. They have
also not executed proper documents with the depositors. They are not conducting any genuine
business to generate income and hence they are not in a position to repay the deposits as well as
interest to the public. Since the acts of omission and commission by the accused persons and their
firms/companies amounted to violations of The Tamil Nadu Protection of Interests of Depositors (in
Financial Establishments) Act, 1997 (TNPID ACT), in addition to the offences under the IPC Act,
provisions of TNPID Act have also been invoked while registering cases.

II. Accused Details:

Out of which 334 accused involved in 105 cases, So far, 191 accused have
been arrested and remanded into Judicial Custody.

III. High Lights :

No. of cases Registered 105

Total defaulted amount Rs.496.31 Crores
Total No. of depositors 24,687
Properties Identified Rs.78.60 Crores
No. of G.O.’s Received 60
Properties attached value Rs.51.77 Crores

Two accused in emu scam sentenced to 5 years in jail

The charge sheet was filed before the TNPID court in Coimbatore in November 2013. After Senthil
Kumar failed to appear before the court, judge K Babu issued a warrant against him. The Perundurai
police arrested Senthil Kumar and he was remanded in judicial custody in October, 2016.

On Wednesday, the judge found them guilty under Section 420 (cheating) of the IPC and sentenced
them to three years imprisonment, besides imposing on them a penalty of 80,000 each. The judge
also sentenced them to five years imprisonment under Section 5 of TNPID Act and also slapped with
a fine of 4 lakh each. The court also slapped a fine of Rs 2.4 lakh on the company, Sri Sakthi Emu
Farms, under sections 4 and 5 of the TNPID Act. The judge said if they failed to pay the penalties,
they will spend another year in jail.

As per the Coimbatore economic offences wing, the city has registered 25 cases under Emu scam,
with over 5,000 complaints and a default amount of 150 crore. The officials said over 100 have

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already been arrested, including the mastermind M S Guru, the biggest promoter of emu contract
farming. Totally, in the state, out of the 105 emu cases, 92 are in the court.

In 2006, several farmers from Erode, Namakkal, Salem, Tiruppur, Coimbatore, Dindigul, Karur,
Sivagangai, Trichy and Tirunelveli districts and other areas in Tamil Nadu were lured into joining
the emu farming scheme, depositing huge amounts of money. They were promised high returns
which were paid in the initial months but soon the payments stopped and the scamsters absconded.

The owner of the company, Susi Emu Farms at Perundurai absconded but was later arrested based
on complaints from farmers in 2012. The EOW of Tamil Nadu police has registered 105 cases with
over 24,687 complaints from the depositors who were cheated to the tune of 496.31 crore.