Trump Organization’s India Partner Accused by Foreign Investors of $147 Million Fraud

A real estate company that had partnered with the Trump Organization for an office building in Gurugram, a satellite town near New Delhi, has been accused of siphoning off $147 million from foreign investors, according to the Washington Post.

The Children’s Investment Fund Foundation, a charity of British billionaire Christopher Hohn, who was knighted for his philanthropic work in 2014, and Axon Partners, an equity firm run by former Goldman Sachs executive Dinakar Singh, based in London and New York respectively, filed a criminal complaint with the New Delhi police in February 2018 against real estate development company IREO’s managing director Lalit Goyal, co-founder Anurag Bhargava and others engaged in “large-scale fraud” by “illegally siphoning off” at least $147 million of investor money. The actual amount could be as much as $200 million, the complaint said.

Bhargava is a United States-based Non-Resident Indian (NRI) and sits on the board of the University of Pennsylvania’s engineering school and the arts advisory council for the South Asia Institute at Harvard.

The criminal complaint was made on the basis of documents presented by the former CEO of IREO who has turned whistleblower. Ramesh Sanka, the former CEO, said he that he saw “various acts of cheating, fraud and misappropriation of money” at IREO that created “huge wrongful gains” for the company’s managing director and his associates. Sanka quit in 2016 and filed a police complaint in February 2018 in Gurugram against the managers of the IREO fund.

According to the complaints made by the investors, Goyal was at the heart of the fraud. The accusation was backed by Sanka’s statement that Goyal “was the final decision maker on all matters” at IREO, according to the Associated Press.

Lalit Goyal, managing director, IREO. Photo: LinkedIn

Singh and Hohn wrote to investors in 2017 saying that the managers of IREO have been difficult to reach and show no indication of returning the investor money along with promised profits, the Washington Post said. The fund was based in Mauritius, where Singh and Hohn launched legal proceedings earlier.

“After roughly 10 years, we estimate that investors have received distributions of only $250 million, while management has collected over $300 million in management fees, and to this day management does not have a plan for returning out capital before the end of various funds’ lives,” they wrote to investors in April 2017.

In a recent letter on March 9 from Hohn and Singh, the investors said Goyal “and related entities appear to have diverted funds” worth nearly $150 million, and that they have seen evidence “suggesting there may have been wrongdoing and theft well beyond these amounts.”

The parties involved in the matter have not made a comment yet. The complaint doesn’t mention the Trump Organization.