An Indian company that is partnering with the Trump Organization on an office tower project has been accused of running an elaborate real estate swindle that cheated investors out of nearly $150 million, according to complaints filed with Indian authorities.
Ramesh Sanka, the former CEO of the real estate firm IREO, said in the documents obtained by The Associated Press that he saw “various acts of cheating, fraud and misappropriation of money” at his onetime employer that created “huge wrongful gains” for the company’s managing director and his associates.
The documents make no mention of the Trump Organization, and focus largely on two real estate deals that began years before the organization signed a 2016 agreement with IREO to partner on an office tower in Gurgaon, outside New Delhi.
Sanka quit the company in late 2016 “because I was increasingly uncomfortable with the way in which IREO’s business was being conducted,” according to a police complaint he filed in late February in Gurgaon, a sprawling and ever-growing satellite city of New Delhi.
In a statement at the time, Donald Trump Jr. said: “IREO 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.”
The Trump Organization has licensing agreements with all its Indian business partners, who build the properties and acquire the Trump name in exchange for a fee.
The Trump Organization did not immediately respond to requests for comment from The AP.
Sanka’s accusations were first reported by The Washington Post.
His statements form the basis for an Indian police complaint filed by two large international investors, the UK-based Children’s Investment Fund Foundation, a philanthropy founded by British billionaire Chris Hohn, and New York-based Axon partners.
The complaint accuses Lalit Goyal, IREO’s managing director, of being at the heart of the alleged fraud, with Sanka’s statement saying he “was the final decision maker on all matters” at IREO.
The documents focus on two deals, one for 78 acres in the small town of Bhiwadi, about 30 miles from Gurgaon, and another for 37 acres of land in Gurgaon.
Through a series of sub-deals, the documents say much of the investment money was channeled away from real estate developments and to Goyal and people close to him.
The complaint filed by Axon and Children’s Investment Fund Foundation says the Bhiwadi deal was “nothing but a sham planned by Lalit Goyal in conspiracy with various other accused persons to misappropriate about $62 million.”
A March 9 letter from Hohn and Dinakar Singh, Axon’s managing partner, say Goyal “and related entities appear to have diverted funds” worth nearly $150 million, and that they have seen evidence “suggesting there may have been wrongdoing and theft well beyond these amounts.”
The letter, obtained by The AP, was sent to IREO investors.
Goyal and other top IREO officials could not be reached for comment.
The Children’s Investment Fund Foundation and Axon had originally filed suit in Mauritius, where the IREO investment funds were incorporated, trying to pressure IREO to manage them better.
In February, before accusations of mismanagement had shifted to accusations of fraud, Goyal told Barron’s magazine that IREO carefully watched over investor money and that that “we are very hopeful they will get much more than what they invested back.”
Donald Trump Jr. recently finished a trip through India, promoting properties that have licensed the family name.
The Trump Organization has five projects in India, making it the brand’s largest market outside the United States. One complex is already open in the central Indian city of Pune, with other developments in various stages of construction in Kolkata and Mumbai, and two in Gurgaon.