Hyderabad: Private venture investors have lost $1.5 billion bet on the Indian real estate after the realty prices crashed in the economy. Allegations of swindling of money by the promoters of fund managing company and slow legal process have put India’s ease of doing business tag into a question.
According to an investigation by Bloomberg, a host of investors including Dinakar Singh’s Axon Capital, Chris Hohn’s Children’s Investment Fund Foundation (CIFF) and Ken Griffin’s Citadel LLC invested in Ireo to get out-sized returns by investing in the Indian real estate.
The money pooled in by the investors catapulted Ireo into one of the biggest players in Indian realty. However, things have gone worse as the realty market has fizzled out. However, Axon and CIFF claim to be “victims of a massive fraud orchestrated by Ireo co-founder Lalit Goyal.” The charges appear to be based on Ireo’s new CEO Ramesh Sanka’s statement that he had seen “various acts of cheating, fraud and misappropriation of money.” Mr Sanka resigned as Ireo’s CEO in December 2016.
“It is simply ridiculous that the Indian system can move so slowly. The entire country’s reputation will suffer badly if authorities fail to act,” said Mr Singh, whose AUM have slumped to less than $1 billion from $14 billion in 2008.
According to Bloomberg, more than half the investors in one of Ireo’s funds have petitioned the Mauritius court to appoint a liquidator to wind up the fund.
