NEW DELHI: Enforcement Directorate on Tuesday conducted extensive searches on Open Society Foundations (OSF), promoted by US billionaire currency speculator and hedge fund operator George Soros who has been accused by BJP of acting against India’s interests.
The raids in Bengaluru at OSF and linked entities were the fallout of an inquiry into FDI sourced by OSF in violation of Foreign Exchange Management Act guidelines.
Sources said Open Society Institute, US, has been put under prior reference category (PRC) by the home mini stry since 2016 due to allegedly undesirable activities. So, OSI is required to secure prior sanction from the ministry to send funds to FCRA-registered organisations in India.
ED action coincides with heat Soros is facing back home
Sources said investigation found Soros Economic Development Fund (SEDF), OSI’s social impact investment arm, provided funds to 3 Indian companies — Rootbridge Services Pvt Ltd (RSPL), Rootbridge Academy Pvt Ltd (RAPL), and ASAR Social Impact Advisors Pvt Ltd (ASAR). These companies received approximately Rs 25 crore from SEDF between 2020-21 and 2023-24.
SEDF funds to RSPL were through compulsorily convertible preference shares. However, since SEDF could not make foreign donations directly to Indian NGOs without MHA approval, the George Soros-funded entity explored alternative options to bypass PRC restrictions. FDI in RSPL is suspected to be a colourable arrangement violating FDI norms, officials said.
“RAPL, incorporated in 2019, received Rs 2.7 crore from SEDF as commission agent services without rendering any services. This suggests RAPL acted as an agent for SEDF to bypass FCRA provisions for funding NGOs in India,” a source said.
ASAR, incorporated in 2016, received Rs 2.9 crore from SEDF as ‘service fees’. The investigators, however, are not convinced and suspect the funds to be donations in disguise, meant for NGOs in lieu of services which were, in fact, never rendered to SEDF.
OSI group also set up an investment company, Aspada Investment Company (AIC), in Mauritius to channelise funding to India.
Aspada Investment Advisors Pvt Ltd was established in Bengaluru to manage SEDF’s investments in India. However, the body, now Lightrock Investment Advisors Private Limited, was not in the loop about Rs 300 crore SEDF provided to 12 NGOs.
ED action coincides with the heat Soros has been facing back home in the US after the election of Donald Trump as President. The hedge fund operator had aligned with hardline liberals and openly opposed Trump.
