Ugandans have once again fallen victim to a fraudulent investment scheme known as “Capital Chicken,” which promised lucrative returns in the poultry business.

This elaborate scam specifically targeted corporate investors seeking to profit from chicken farming without direct involvement.

Capital Chicken presented itself as an agribusiness contract farming partnership enterprise, claiming to rear poultry on behalf of individuals lacking the skills, land, capital, market access, or time to do so themselves.

Their headquarters were located at Plot 74, Kanjokya Street in Kamwokya and another branch at Nyumba Kubwa on Ben Kiwanuka Street, both in Kampala.

The scammers employed a multi-pronged approach to deceive potential investors. They displayed photos of a supposed chicken farm in Mukono to lend credibility to their operation.

The scheme enticed individuals to invest a minimum of one million shillings, with the promise of receiving 15% of their total investment as monthly profits. Investors could choose to reinvest their initial capital, compounding their gains.

To instill trust in their victims, Capital Chicken claimed to be a registered company and assured investors that their funds were insured.

They even announced plans to open chicken selling shops across the country, urging investors to prepare for ownership.

Many victims initially believed in the legitimacy of Capital Chicken, with some reaping profits more than twice. The company also welcomed group investments, attracting the interest of savings and credit cooperatives (saccos).

The scheme operated smoothly, with contracts expiring every five months. Investors could choose whether to withdraw their profits or reinvest. The company offered flexible payout options, including electronic fund transfers, mobile money, or cash.

However, the scam primarily targeted Ugandans in the diaspora, particularly those working in the Middle East, who were hesitant to send their money home due to past experiences of being defrauded by relatives. These victims are now grappling with significant financial losses.

Capital Chicken also advertised its fraudulent scheme through various media outlets and social media influencers, further legitimizing its operation.

The red flags started to emerge last month when the Capital Markets Authority issued a warning that Capital Chicken was not regulated by them, urging the public to exercise caution. The Authority emphasized the limited recourse available to investors in unregulated schemes.

In response, Capital Chicken attempted to defend its legitimacy, citing its registration under the Companies Act of 2012 and highlighting its Sanlaam insurance cover. However, the scheme’s problems escalated in August when investors began experiencing delays in receiving their promised returns.

As panic set in, some investors visited the company’s offices in Kamwokya, only to find them closed with a notice indicating that staff were away on a retreat. When they returned on the specified date, the offices remained closed, and the police officers stationed there had vanished.

The situation worsened when it became apparent that the CEO had absconded with investors’ funds, prompting some of his deputies to flee the country as well. The hunt for other managers is ongoing, with at least two employees already arrested.

This scam bears a striking resemblance to past Ponzi and pyramid schemes that have plagued Uganda, including the notorious Telex Free and Amazon traders, which left countless victims with significant financial losses. As investigations continue, the victims of Capital Chicken join the unfortunate ranks of those defrauded in elaborate financial scams.