India’s Enforcement Directorate (ED) has raided offices linked to the Open Society Fund (OSF), founded by American billionaire George Soros, and its investment arm, the Soros Economic Development Fund (SEDF), as part of an investigation into possible violations of the country’s currency laws. About this informs The Indian Express.
Searches took place at the premises of recipients of funding from both OSF and SEDF, including international human rights organizations and Aspada Investments Pvt Ltd. Actions were taken within the framework of the Foreign Exchange Management Act (FEMA).
Aspada Investment was incorporated in Mauritius to channel funding to India, while Aspada Investment Advisors Pvt Ltd (AIAPL) was incorporated in Bangalore on 4 February 2013 to manage SEDF’s investments in India. According to sources, SEDF has invested in more than 12 Indian companies for a total of about 300 crore rupees (approximately $36 million) and the ED is currently gathering evidence in the case.
According to preliminary investigation data, on May 30, 2016, India’s Ministry of Home Affairs (MHA) placed OSF under the “prior approval category” (PRC). Since then, the fund has been required to obtain MHA’s permission to transfer funds to entities registered in India. SEDF is OSF’s social impact investment arm.
To circumvent the restrictions, OSF set up subsidiaries in India and raised funds through foreign direct investment (FDI) and advisory fees. According to the ED, these funds were used to finance the activities of non-governmental organizations, which is considered a violation of the Foreign Exchange Management Act. Currently, the investigation is focused on establishing the final use of funds raised through FDI.
