Bitter harvest in forests brimming with scams : The Tribune India

Join Whatsapp Channel

My Take

Bitter harvest in forests brimming with scams

ABOUT two decades ago, I had money to spare. A friend told me of an investment opportunity where he planned to park some of his funds. The company in question, Ion Exchange, was reputed, its main business being water purification.

Bitter harvest in forests brimming with scams

Goldmine: In 10 years, Golden Forests collected Rs 1,000 crore from 2.5 million investors.



Rahul Singh

ABOUT two decades ago, I had money to spare. A friend told me of an investment opportunity where he planned to park some of his funds. The company in question, Ion Exchange, was reputed, its main business being water purification. It was branching into “social forestry”, setting up an “Enviro Farms” project. It had bought “degraded land” cheaply in Maharashtra’s Konkan and wanted to sell in parcels of 1 or more acres. If you purchased a plot of at least 1.5 acres, you were entitled to set up a small farm dwelling. A club house was also planned on the site. On the degraded land, the company would set up a drip-irrigation system, where Alfonso mango saplings would be planted and the fruit sold, earning the investor sizeable profits. However, as it takes about seven years for a mango to start fruiting, there would be “no return” for that period. Then, the money would start rolling in. As it was agricultural income, there would be no tax on it.

It sounded good and I invested Rs 3 lakh for a 1.5 acre plot, as did about 50 or 60 others. Soon after we had put the money down and completed the paperwork, the company organised chartered buses to take us, the buyers, from Mumbai to the chosen plot of land. This was a few hours away, 4 or 5 km off the road to Goa coast. The plot had been neatly divided into parcels of land, and was surrounded by a fence, with an entrance gate and security guards manning it. Clearly, the company wanted to reassure us that our money was being well spent. The mango saplings were flourishing, the drip-irrigation was in place, and that the degraded land had turned fertile.

After the seven-year period of “no return” on investment was over and the returns should have started coming in, something went wrong. Word filtered down that the government had started looking more closely at these “plantation” schemes. What I did not know then was that many other, in fact hundreds, of such “social forestry” projects had been started by a variety of entrepreneurs, and that the vast majority of them were scams. Even though “Enviro Farms” was not among them, it came, willy-nilly, under the SEBI scanner. Hence, it was unable to continue operations and the investors were left high and dry, with a “dead” investment. True, the parcels of land belonged to us, but as they were not being managed by Ion Exchange and the mangoes not being sold, our land was virtually worthless. A few years ago, I drove to the site to see what had happened. The mango trees were flourishing, laden with yet-to-ripen mangoes. But the surrounding fence was broken, as was the main gate, with no security guards in sight.  The only comforting thought was that it had been a feasible project.

That was not the case with two much larger, yet similar-sounding schemes, which were actually big-time frauds: Golden Forests and Anubhav Plantations. In the latter case, investors were offered “teak” certificates and told their deposits were secured with valuable teak trees and that these deposits would give 20 per cent annual returns for the first 20 years — three times the fixed deposit returns offered by banks. The company claimed to own teak plantations spread over 1,000 acres. After just two years of the high 20 per cent returns, the cheques began to bounce. It turned out to be a classic Ponzi scam, whereby the money from new investors was initially used to give exorbitant returns to the old investors. But only for a short time.

The company’s founder, one Natesan, enjoyed a lavish lifestyle while his con game was on. When it was exposed, he went underground but later spent seven years in jail. Meanwhile, thousands of investors, many of whom had put their entire life savings in Anubhav group, were left penniless. They had been duped of Rs 400 crore.

But the Golden Forests and Pearls Group combine dwarfed even Anubhav. In 10 years, Golden Forests, headquartered in Chandigarh, collected Rs 1,000 crore from 2.5 million investors before it went bust. Pearls outdid even that with a collection of a mind-boggling Rs 49,100 crore from over 58 million customers before it went belly-up. Though the Supreme Court ruled a year ago that 70 per cent of the principal amount must be refunded to the investors by the combined group “in three months”, I have found no evidence that any refunds have actually taken place.

And then, just the other day, I saw a front-page flap in the largest selling daily newspaper in the country, inserted by one of our numerous “godmen”. The insertion, which must have cost a packet, was all about saving the ecology of a river basin. But what set alarm bells ringing in my mind was the emphasis on “trees” and “agroforestry”. I have always had an innate suspicion of India’s godmen, with their self-given appellations, like Swami, Baba, Guru of course, even Bhagwan. Beneath the thin veneer of their “spirituality” lurks the bottom line for all of them — cold, hard cash. So, when a so-called “guru” asks you to donate even a small amount of Rs 42 for a tree to save the basin and grow 2,420 million more trees, be sceptical. Very sceptical.

— The writer is a veteran journalist

Top News

Delhi High Court dismisses PIL to remove Arvind Kejriwal from CM post after arrest

Delhi High Court dismisses PIL to remove Arvind Kejriwal from CM post after arrest

The bench refuses to comment on merits of the issue, saying ...

US makes another remark on Kejriwal's arrest, reacts to freezing of Congress bank accounts

US makes another remark on Arvind Kejriwal's arrest, reacts to freezing of Congress bank accounts

We encourage fair, transparent and timely legal processes, s...

Punjab CM Bhagwant Mann, wife Gurpreet Kaur welcome baby girl

Punjab CM Bhagwant Mann blessed with baby girl

Bhagwant Mann tied the knot with Dr Gurpreet Kaur from Pehow...


Cities

View All