1. PLANTING A DREAM:
ANUBHAV PLANTATION SCHEME
"You are giving deposits because you trust me.
Leave it at that."
- C. Natesan, Chairman, Anubhav Group, in 1998
Presented by:Ashish barapatre (13034)
Aditya kapoor(13031)
Bhavik kothari(13035)
Ankur gupta (13032)

2. ABOUT C.NATESAN
• C.NATESON was a commerce graduate from Chennai's
Vivekananda College and a chartered accountancy course
dropout.
• Natesan started his career in 1983 by launching a
consultancy firm, 'Yours Faithfully Consultancy.‘
• In 1992, he started Anubhav Plantations Ltd. (Anubhav)
was floated as a public limited company.
• Over the years, the Anubhav umbrella expanded to
include various other companies.
• In 1998, Anubhav had become a Rs 250 crore group.
These companies were backed by a nationwide
infrastructure of 91 offices and over 1,800 employees.

3. ABOUT THE CASE
DOOMED DEPOSITORS
• On 2nd December 1998, thousands of people
at the New Woodlands Hotel in Chennai.
• All of them were investors in the collapsed
Anubhav group's teak plantation
schemes, and a majority of them were on the
verge of bankruptcy.
• The investors had sensed wrong doings at
Anubhav when the cheques issued to some of
them bounced in mid-1998.

4. SCHEME 1
OPTION A:• A 20 year scheme, it offered a 77 times return on a minimum
deposit of Rs 6000 (maximum Rs 60,000). One Rs 6000 unit
fetched the investor 300 square feet of land with three teak
saplings.
• The investor was promised Rs 1,000 every year for the first 6
years; an additional Rs 6,000 at the end of the 6th year; and
another Rs 12,000 after the 12th year.
• Finally, at the end of the 20th year, the investor was to receive
Rs 3 lakh or 40 cubic feet of teak, whichever he preferred.

5. SCHEME 2:• Same as Option A, except that the annual
returns in the first 6 years were replaced by a
payback of Rs 15,000 at the end of the 6th
year.

6. SCHEME 3
• For an investment of Rs 6,000, the investor got
outright ownership of the land, as well as a 5year lease of 100 sft. He, in turn, sublet the
land to Anubhav, with the returns amounting
to bi-annual payments of Rs 500, and Rs 5,000
at the end of the 5th year, and a bonus 1.13
cubic meters of teak - valued at Rs1 lakh - at
the end of the 20th year.

7. WHAT MADE PEOPLE TO INVEST
• Natesan had associated Anubhav with the World Wide
Fund For Nature (WWF) and thus conveyed a positive
image of his company to the media and the investors.
• The interest earned on plantation schemes was treated
as agricultural income, it was exempt from tax.
• As a result, Anubhav's schemes became very popular
and attracted thousands of investors.
• Moreover, since the unit value of the teak schemes
was very small, investors could easily afford them.

8. THE PLANTATION WITHER
• Anubhav's shaky financial condition could easily be
seen in its books. In 1996-97, plantation income
amounted to Rs 35.32 crore and net profit was Rs 38.69
lakh.
• The low profitability was attributed to the group's
high, non-productive, expenses. In March
1997, Anubhav's current liabilities exceeded its current
assets by Rs 6.40 crore.
• The company's paid-up equity capital was just Rs 36
lakh while its borrowings, both secured and
unsecured, amounted to Rs 2.64 crore. Loans and
advances amounted to Rs 25.95 crore, of which Rs
10.75 crore had been lent to other companies of
anubhav group.

9. HOW THE SCHEMES WORKED
• Rs 35 lakh was contributed from the promoter's
side, the public funds raised were usually above Rs
300 crore.
• Most of these companies did not even have
sufficient crop insurance. Also, the offer documents
of these companies did not highlight the risks
involved.
• The lack of industry regulation made it virtually
impossible for the average investor to distinguish
between a fly-by-night operator and a genuine
player.

10. PRUNING THE PLANTATION
• More than 4500 plantation companies had raised over Rs
25,000 crore from the public during the 1990s. The relaxity of
the concerned regulatory authorities was a major factor
behind these scams.
• In the early 1990s, setting up a finance company was very
simple as there was no supervisory authority for sole trading
or partnership firms, nor did they fall under any regulatory
framework.
• This gave them a competitive advantage.
• Though there was a limit on the number of depositors these
sole trading or partnership companies were allowed to
have, there was no ceiling on the amount of deposits they
could collect.
• As per the Partnership Act, a partner in one company could
be a partner in numerous other partnership firms...

11. REAPING THE FRUITS OF GREED
• With the stock markets performing badly and banks
cutting back on interest on deposits, plantation
schemes appeared very attractive for investors
impatient for returns and willing to take risks.
• As nationalize banks pay interest upto 5-7 %
anubhav plantation scheme was giving 21-24%
• Explaining why these schemes were so attractive to
the public as well as the finance companies, Natesan
commented, "We offer 24% for all deposits of three
years and above. This is not high when compared
to the interest charged on loans by banks. I borrow
from banks at 18%. When I do that, I have to offer
security for a similar amount...

12. PENALTY PAID
• A Criminal case was registered against the
Chairman and Directors of Anubhav Group of
companies in Chennai City Police, CCB Cr .No
1431/1998 U/s.120 (b), 409, 420 r/w.34 IPC on
13.10.1998.

13. • Total amount involved: Rs.107,12,33,696/• Amount refunded by the company:
Rs.100,44,64,461/• Total No. of Claims settled -31,431 depositors.
• Total No. of depositors: 33,475.
• The Chairman of the company C. Natesan was
detained under Judicial custody for the
continues period of 8 years. He was released
on bail on 22.03.2007.

14. • As on 30.04.2013, 2044 depositors are
pending for settlement. Value of claims to be
settled is Rs.6,67,69,235/- (Rupees
Six crores sixty seven lakhs sixty nine
thousand and two hundred and thirty five
only).