Wednesday , December 19 2018

TCI, Axon accuse India real estate firm of $1.5bn fraud

Bloomberg

Hedge funds run by Christopher Hohn and Dinakar Singh accused one of India’s largest real estate developers of defrauding its foreign investors of at least $1.5 billion.
“If we do nothing, we will largely bleed dry and get nothing back,” Singh, who heads Axon Capital, said at a gathering in New York of investors in a fund started by Indian developer IREO Management. He described the alleged fraud as “simply astonishing.”
Hohn’s Children’s Investment Fund Foundation and Axon invested about $300 million in a fund run by IREO.
The firms have filed a criminal complaint against IREO in New Delhi, and started legal proceedings in India and Mauritius, where the fund is based.The investors allege IREO Managing Director Lalit Goyal has created a web of shadow companies connected to his relatives, friends and business associates in order to siphon money from the fund.
The hedge funds originally estimated the alleged fraud by IREO executives at about $147 million, but upped that estimate at a recent meeting, which was attended by about 70 investors.
IREO didn’t respond to a message seeking comment before the meeting. The firm has denied the fraud allegations in earlier legal filings.
In 2016, IREO partnered with the Trump Organization to build an office tower in Gurugram, on the outskirts of New Delhi. At the time, Donald Trump Jr. called IREO “truly a fantastic group”. The criminal complaints make no mention of the Trump Organization.

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