Foreign investors accuse Indian realty firm of siphoning off $147 million of their money: Report
The company, IREO, has partnered with the Trump Organization to build an office tower project in India.
Foreign investors of an Indian real estate company have accused the firm’s management of “large-scale fraud” of at least $147 million (Rs 959 crore), the Washington Post reported on Monday. The company, IREO, has partnered with the Trump Organization to build an office tower project in India.
Two global investment firms – the London-based Children’s Investment Fund Foundation and Axon Partners in the United States – filed a complaint with the Delhi Police in February. They accused Lalit Goyal, the company’s managing director, and co-founder Anurag Bhargava, among others, of “illegally siphoning off” up to $200 million (Rs 1,304 crore) of their money.
The accused built a fraudulent web of companies and entities to divert the money to themselves, and in one case, a project in Rajasthan was used as “nothing but a sham...to misappropriate about $62 million”, the complaint said, according to the Washington Post.
The two firms have invested nearly $300 million in IREO. A former chief executive of IREO alerted investors of the potential fraud.
In a letter to the investors on March 13, Goyal wrote that the allegation of “fraud, diversion and misappropriation of funds” is “false, baseless and devoid of any merit”.
During a visit to India in February, Trump Organization Executive Vice President Donald Trump Jr named his firm’s partnership with IREO as one of the “five incredible deals”. He had called IREO “truly a fantastic group” when the companies announced their project in April 2016.
Goyal’s representatives and the two firms declined to comment on the allegations, the daily said while adding that attempts to contact the Trump organization had failed.