Yet another investment scam

Investment scams are a "miraculous phenomenon" that consistently recurs in Kerala without fail. Nowhere else in the world will you find people who, despite being cheated repeatedly, fail to learn from past mistakes like here. News of the Rs 600 crore half-price scam had just begun to fade when a fresh Rs 450 crore FarmFed investment scam has come to light. Preliminary investigations suggest that around Rs 400 crore was collected by FarmFed through bank transactions, while an additional Rs 60 crore was allegedly accepted in cash, though this claim remains unverified. The full extent of the fraud can be determined only through a thorough probe by investigating agencies. Reports indicate that nearly 7,000 people made large investments across 16 branches in 14 districts.

As with most scams, this one too exploited human greed. Investors were promised an annual return of 12.5%, and some individuals are believed to have invested as much as Rs 5 crore, lured by this assurance. The scam was led by FarmFed chairman Rajesh Pillai and MD Akhin Francis. When interest payments stopped and principal amounts weren’t returned, investors from Palakkad, Kozhikode, and Thrissur convened a meeting and summoned the two. The chairman claimed there was no fraud and that all accounts could be audited by anyone. In April, he promised that the first instalment of the principal would be returned to all investors within a month. He also assured that Rs 40 crore would be raised by selling off FarmFed properties and distributed accordingly. But nothing happened.

Once investors realised they had been cheated, they began demanding their money back en masse. In such situations, these investment empires collapse like a house of cards — exactly what happened with FarmFed. The “autobiography” of such scams is almost always the same: the crores collected are diverted for personal luxury. Offering 12.5% interest through legitimate business operations is nearly impossible. Yet, people easily fall for enticing promises, ignoring reality. Even the name “FarmFed” was deliberately chosen to convince people that the high returns came from profits made through prawn farming, ginger, black pepper, and banana plantations.

The internal auditor later revealed that the pepper crops were damaged and the ginger had rotted. It’s easy to create glossy reports showing agricultural profits to mislead investors, but when real farming begins, the harsh truths emerge. They had reportedly spent crores on plantations in Wayanad and Kuttikkanam, some of which ran into legal issues. Many employees were also hired using funds collected from investors. In the end, both the locals and the employees were deceived. Along with the ongoing investigation, authorities must also seize the assets of those involved and initiate steps to return at least a portion of the investors' money.