Author: Krishika Yadav , Avantika University Ujjain (M.P)
To the Point
In early 2010s , in many districts of Tamil Naidu faced a white collar scam i.e. Emu Egg Scam. This was massive fraud that happened in history of India . Emu is second largest bird of world . The emu is a large, flightless bird mostly found in Australia. It has long legs which helps it to run very fast, and this bird lays big green eggs. So in Tamil Naidu India, many emu farming company lured thousands of investors with promises and by giving them a scheme of high return through live stocks based investment . These operation turned out to be ponzi schemes , which swindlling investors out of more than ₹30 crore across multiple districts.
ABSTRACT
Use of Legal Jargon
The emu scam is a textbook instance of financial misrepresentation and fraudulent inducement, compounded with breach of fiduciary duty and unlawful solicitation of deposits. These are critical violations under
- IPC Section 420 – Cheating and dishonest inducement
- IPC Section 406 – Criminal breach of trust
- IPC Section 120B – Criminal conspiracy
- TNPID Act, 1997 – Tamil Nadu Protection of Interests of Depositors
The Emu scam included major fraudulent inducement, fiduciary breach, and unauthorised deposit collection happened in india which was the major example of white collar crime
The Proof
Three major companies came under legal and public scrutiny during the investigation:
1. Susi Emu Farms (Erode)
- Owner: M.S. Guru
- Amount Collected: ₹19.20 crore
- Investors: 1,087
- Scheme: Pay ₹1.5 lakh for a pair of emus, receive monthly returns of ₹6,000 for two years.
- Reality: Only initial returns were issued; within a year, payouts ceased.
After multiple FIRs, Guru was arrested and convicted. In 2019, the TNPID Special Court sentenced him to 10 years of rigorous imprisonment and imposed a ₹19 crore fine for restitution. He was charged under IPC Sections 406, 420, 120B, and the TNPID Act.
2. Abi Emu Farms (Salem)
- Key Accused: R. Raja & Co.
- Amount Collected: ₹7.95 crore
- Investors: 547
- Modus Operandi: Promises of livestock leasing and feed management contracts
- Outcome: Assets frozen by the Economic Offences Wing (EOW); partial investor refunds ordered.
3. Queen Emu Farms (Coimbatore & Erode)
- Founders: Mayilsamy and associates
- Amount Collected: ₹34.38 crore
- Investors: 1,135
- Fraud Pattern: Multiple overlapping schemes offering unrealistic monthly bonuses and emu buy-back assurances
- Legal Action: Court ordered seizure and auction of real estate and vehicles for victim compensation
These scams were highly orchestrated with fake brochures, staged farm visits, forged income projections, and unverified “contracts” signed with banks and international emu buyers.
Case Laws
- State of Tamil Nadu vs. M.S. Guru (Susi Emu Farms)
M.S. Guru, Managing Director of Susi Emu Farms India Pvt. Ltd., launched emu farming investment schemes in 2010, promising high monthly returns and bonuses to investors who deposited ₹1.5–2 lakh. The schemes offered emu chicks, feed, and infrastructure, with guaranteed returns of ₹6,000–₹9,000 per month and full principal repayment after 18–24 months.
The company failed to honor its promises, leading to over 3,000 complaints from 13,000 investors. Investigations revealed that the firm had collected ₹97.48 crore from 3,767 depositors under two fraudulent schemes.
- A case was registered under Sections 406, 420 IPC and Section 5 of the TNPID Act.
- The Tamil Nadu government issued **G.O.Ms.No.711
- State vs. R. Raja & Ors. (Abi Emu Farms)
Abi Emu Farms, run by R. Raja and others in Salem, collected ₹7.95 crore from investors by falsely promising monthly returns through emu farming schemes. When the company defaulted, legal action was taken. The TNPID Special Court convicted the accused under IPC Sections 120B, 420, 406 and Section 5 of the TNPID Act, sentencing them to up to 10 years’ imprisonment and imposing a fine of ₹1.21 crore.
3. State vs. Mayilsamy (Queen Emu Farms)
Queen Emu Farms, led by P. Mayilsamy and P. Sakthivel, duped over 1,100 investors across Coimbatore and Erode through fake emu farming schemes, collecting ₹34.38 crore with false promises of monthly returns. The TNPID Special Court convicted them under fraud and conspiracy charges, sentencing each to 10 years’ imprisonment and ordering full repayment to victims.
Conclusion
The Great Emu Egg Scam showed how people’s trust was turned into a tool for fraud. What looked like support for farming and rural growth was actually a cover for exploiting legal gaps and financial ignorance.
Laws like the TNPID Act helped stop the scam, but for the future, we need stronger rules, investor awareness, and better checks in place. Stopping fraud isn’t just about punishment it’s about prevention.
FAQS
Q1: How did these emu farms attract so many investors so quickly?
They used emotionally persuasive pitches—framing emu farming as a futuristic, export-driven business model. Combined with high returns and local testimonials, they created an illusion of legitimacy and prosperity.
Q2: Is investing in livestock always risky ?
Not inherently. But when livestock is packaged into a monthly-return investment scheme without underlying business audits, red flags should fly. The key is transparency, traceability, and regulatory approval.
Q3: Why weren’t these firms caught sooner ?
Many operated in regions where financial regulatory bodies had limited access or oversight. They also disguised activities as agri-businesses, thus avoiding early suspicion.
Q4: Were any government departments held accountable?
While no agency was directly implicated, criticism was leveled at local revenue and agriculture departments for not cross-verifying licenses and failing to spot irregularities.
Q5: What happened to the emus?
In many cases, the birds were malnourished or abandoned. Animal welfare NGOs had to intervene after the collapse of the farms.
