Planting a Dream: The Great Plantation Scam of 1990's

Anubhav Plantations, a Chennai based plantation company was involved in one of the biggest plantation scams of the country in 1998. It caused a lot of uproar in the media and also turned out to cause a lot of destruction for the people involved.

Thousands of investors were involved in the scam causing a lot of attention. As the new year is approaching you may want to consider the investments made by you for a brighter financial outlook

By SAHIL DESAI | 3 min Read

History of the company

Anubhav Plantations was founded in 1992 by C. Natesan. It was a part of the Anubhav group of companies. By 1998, Anubhav group was worth ₹250 crore and, apart from its teak-plantation schemes, was involved in other enterprises including finance and real estate. These companies were well-structured and backed by a nationwide infrastructure of 91 offices and over 1,800 employees.

What actually happened?

The company  sold shares in teak plantations on guaranteed interests and later diversified to other schemes through four other principal companies.

The company suddenly closed down in 1998 when it could no longer pay its depositors, leaving its thousands of investors unpaid (₹400 crore).

In January 1998, some investors started reporting that cheques issued to them by Anubhav Plantations are being bounced. Most of the investors in the company were middle class and retired Indian working-class people who had invested their savings. Their amounts varied between ₹15,000 and ₹50,000 per person. On 2 December 1998, a letter was sent to all the investors of Anubhav group by an advocate from a law firm that was following up the Anubhav group in response to court cases that had been filed against it to come to the Woodlands hotel in Chennai to receive their long-due payments. The letter was actually sent to invite them to come and check all the records and the balance sheet of the company. When some of the investors landed at Anubhav's office, they were met with locked doors and so lodged complaints with the police. Later, thousands of investors demonstrated in front of the company's headquarters in Chennai, however, by then, the main accused, Natesan, had already gone underground.

Further course of action

A government enquiry was subsequently launched into the Anubhav group. Its investigations revealed that the company had defrauded its investors through various plantation schemes, paying initial interests to old investors by simply channeling them from new investments by new investors. Natesan, the chairman and managing director of the Anubhav Plantation, was subsequently caught by the police and placed in judicial custody. The court had found proof that Anubhav Plantation funds were diverted.

Conclusion

The Anubhav teak plantation scam is often included in the list of scams that occurred in post-liberalized India in the 1990s and has been called "The Great Plantation Scam of the 1990s". However, plantation-related frauds continue to occur in the country, as people get lured by promises of high interests. So the start of a new year is a good opportunity to conduct a financial review of the investments made by you so you can build your wealth, increase your net worth and grow your investments by not not getting lured by the promise of high interest. 

After seven years of judicial custody, Natesan was released on bail in 2007. Of the ₹1,071,233,696 invested by small investors, the company ultimately refunded Rs. 1,004,464,461 to 31,431 depositors. About Rs. 7crore has still not been refunded to 2,044 depositors.