IREO has been accused of cheating investors to the tune of nearly US$150 million.
An Indian company associated with Trump Organization owned by President Donald Trump has been accused of cheating investors to the tune of nearly US$150 million, reported Associated Press.
The investors have filed a complaint with Indian authorities against the real estate company IREO. The complaint is based on the statement of Ramesh Sanka, the former CEO of IREO.
Sanka, who quit IREO in 2016, accuses the managing director of the company of fraudulent misappropriation and utilizing the investor’s money for their personal purposes. He claims to have seen the documents proving “huge wrongful gains” made by IREO’s managing director Lalit Goyal.
Ramesh said he quit the company after realizing the fraudulent activities carried out by Goyal and his allies. “I was increasingly uncomfortable with the way in which IREO’s business was being conducted,” he was quoted as saying by AP.
The complaint was filed by two international investors, the UK-based Children’s Investment Fund Foundation, a philanthropy founded by British billionaire Chris Hohn, and New York-based Axon partners at a police station in Gurgaon near New Delhi.
The complainants alleged that the investment made by them in two projects was diverted to Goyal and his associates. The deals were to develop 78 acres in the small town of Bhiwadi, about 30 miles from Gurgaon, and another 37 acres of land in Gurgaon.
According to the complaint, the money invested by the two organizations was channelized through a series of sub-deals. They alleged that Goyal was behind the fraudulent transactions since he “was the final decision maker on all matters” at IREO.
Hohn and Dinakar Singh, Axon’s managing partner, in a letter dated March 9, said that funds worth nearly US$150 million have been diverted by Goyal and his associates.
The suit was originally filed in Mauritius since IREO was incorporated there. Though the complaint doesn’t mention the Trump Organization, the allegations against its associate company may put political pressure on Trump.
Trump has been accused of using his official authority to expand his family business ever since he assumed office. His eldest son Trump Jr.’s recent visit to India had also invited criticism from various corners.
Though the visit was dubbed as an unofficial one, Trump Jr. shared the stage with Indian Prime Minister Narendra Modi and delivered a speech on Indo-Pacific relations on Friday.
Trump Jr. had earlier praised IREO saying the company “is truly a fantastic group and we are looking forward to pushing the boundaries together to create what will soon be one of the most exciting and sought-after commercial towers in India.”
India is the largest market of the Trump Organization outside the US. The company has five projects in India.