The Children’s Investment Fund Foundation and New York-based Axon Partners allege that the Trump Organization’s partner on an office-tower project in India has defrauded investors out of at least $147 million.
The two investment companies filed a criminal complaint with New Delhi police against the Indian real estate developer IREO’s co-founders, the Washington Post reported.
The two firms invested nearly $300 million in a Sir Norman Foster-designed office tower in Gurgaon, and now claim that IREO’s Indian managing director, Lalit Goyal, and others including company co-founder Anurag Bhargava engaged in “large-scale fraud” by “illegally siphoning off” at least $147 million for other projects, the Post reported.
The investors claim Goyal and other set up a web of sham companies to line their own pockets, and in one case they allege a project in the state of Rajasthan “was nothing but a sham . . . to misappropriate about $62 million.”
Goyal declined to comment, but in a March 13 letter to IREO investors he wrote that “as far as the allegation of fraud, diversion and misappropriation of funds is concerned, this is false, baseless and devoid of any merit.”
Bhargava, a U.S. resident who sits on the board a the University of Pennsylvania’s engineering school, co-founded IREO in 2003 with Goyal as a vehicle to invest foreign capital in Delhi’s relatively untested real estate market.
The company now manages more than $1.6 billion from sovereign wealth and university endowment funds. It manages a portfolio of 1,485 acres in the Delhi area and has 18 million square feet of commercial and residential projects under development.
Goyal told the Post in spring of last year that the Trump Organization first approached IREO in 2013 to talk about partnering on a commercial real estate tower. An early deal fell through, but the two sides agreed to a licensing agreement for a luxury commercial tower with the Trump name, “technical assistance” and a percentage of lease income, Goyal told the newspaper.
Donald Trump, Jr., raised conflict-of-interest concerns earlier this year when he traveled to India to promote residential developments the Trump Organization is working on in the country. [WaPo] – Rich Bockmann