The company, which is under the scanner for duping investors with the promise of 10% monthly returns, is now trying to draw many more with a new tea project in Ooty

Another multi-level marketing company, Tycoon Empire International, has duped investors of thousands of crores of rupees under the pretext of promising 10% monthly guaranteed returns on investment. The company is under the scanner of investigators in Kerala and Tamil Nadu. But despite this mess, information available on various blogs on the web indicate that the company has come up with a new plan to lure investors with a tea project in Ooty.

Chennai-based Tycoon Empire International had collected Rs370 crore from 50,000 investors. The company's owners are from Chennai, but it has promoters from Kerala. According to media reports, the Kozhikode police has intensified investigations into alleged money swindling to the tune of Rs370 crore by Tycoon. Police said the company had collected money under the pretext of products, and that its claims to be an ISO certified company are false.

Tycoon offered Rs10,000 per month, besides a commission for enrolling new members, to anyone who could invest Rs1 lakh. According to media reports, most of the people duped by Tycoon are from Payyoli and Vadakara regions and Palakkad and Thrissure districts of Kerala. A majority of those duped are police personnel, government employees and teachers.

According to complainants, the company had paid returns for the first three months, but stopped abruptly after that. There has been no payout since April. One such complaint on consumercomplaint.com states: "I am a member of Tycoons Empire for monthly investment plan @ 8.5% monthly and 1.5% by TDS claim. But after completing one year I have not received TDS form on my submission and have also not received my monthly payouts for the last more than 2-3 months."

Another complaint on the same website reads: "Since April 2011, they have been telling that they are facing legal conflicts. But are not revealing the actual problem, and are simply telling that they would like to do the operations under safe mode. Now all customers are very anxious. Why these guys are so silent? Once they raise amount from the public, they are answerable. From last week they are not updating. At least return our principle amount immediately. This is not the way of treating their customers."

Despite being under investigation, Tycoon has stated on a blog that everything will be solved with the support of the law and that no official will be available for the next ten days as they are engaged in legal work. Interestingly, it has asked its members to refrain from talking about the company's current situation with anyone and holding any group meeting.

The new scheme, advertised on the Internet, promises a unit of land in Ooty tea and real estate that can be re-sold on prior intimation. It also promises active income on creating more unit holders.

A broucher uploaded on one of the blogs says that the membership for the scheme is Rs10, 000, which entitles the member to a unit of land in the tea-estate project. "One unit is equivalent to 1.5 cents, which in turns equals 654.5sq ft. The value of 654.5 sq ft is Rs100,000 for an existing member. Add land value (LV) by paying Rs15,000 against each unit (this total sum will be deducted from the unit cost) and register land in your name immediately. Balance unit cost can be paid back from your green incentive every month. Maximum of 15% on unit advance value is your green incentive. This may differ and it depends on the cultivation output and natural calamities."

For new members, the entry package is Rs15,000 and each membership will get one unit registration. (1 unit = 1.5 cents = 654.5sq.ft = Rs125,000). Basic registration charges and 5% service charges are applicable on each membership. The company also promises price value, land value and online declaration on its official website.

Experts point out that promising such huge values for a piece of land engaged in tea cultivation is a doubtful proposition. Also, given the dubious business operations of the company, the plan appears to be another fraud.

The tea estate scheme brings to mind memories of numerous plantation companies in the 1980s and 90s that collected money for grand land development and agro projects with the promise of guaranteed returns through post-dated cheques. Thousands of investors lost their money and estimates of the losses are in the region of Rs8,000 crore.