A company based in India, that is partnering Trump Organization on an office tower project, has been accused of running a real estate swindle. According to the complaints filed by the Indian authorities, the company has cheated investors of nearly $150 million till now. Ramesh Sanka, the former CEO of IREO, the real estate company, stated that the documents that the Associated Press has obtained reveal various cheating acts, misappropriation of money, and fraud. He added that his ex-employer had created wrongful gains from the deals for the managing director of the company and well as his associates.
In the documents, the name of the Trump Organization has not been mentioned. It focuses on two real estate deals that had started long before the organization signed a deal with IREO in 2016, in order to partner on the office tower project outside New Delhi, in Gurgaon.
Late in 2016, Sanka had left the company as he had been becoming increasingly uncomfortable in the way the business of IREO was being conducted. Donald Trump Jr. at that time had commented that IREO was a fantastic group and they were looking forward to pushing their boundaries and come together to develop the towers.
The Trump Organization has got licensing agreements with all the business partners in India, who are building complexes and acquiring the name of Trump Towers on the basis of a fee. Asked about this controversy, the Trump Organization opted not to make any comments or response. The police complaint filed by the investors is based on the statements made by the former CEO. The complaints have been filed by two large international investors, New York-based Axon partners, and the UK-based Children's Investment Fund Foundation. The latter is philanthropy, founded by Chris Hohn, a British billionaire.
According to the complaints, Lalit Goyal, the managing director of IREO has been accused of masterminding the fraud. He was the final decision-maker in the organization. The documents supporting the fraud focus on two deals. One of these is the 78-acre deal in Bhiwadi, a small town, located around 30 miles from Gurgaon. The other one is located 37 miles from the city. The documents, through a series of sub-dials, reveal that a large section of money invested for the purpose has been channelized to other departments.
According to a complaint filed by Axon and Children's Investment Fund Foundation, the deal was planned by Lalit Goyal and the other people involved misappropriating $62 million.
The suit was originally filed in Mauritius by Children's Investment Fund Foundation and Axon, where the investment funds of IREO were incorporated. This was an attempt to pressurize the company to manage them in a better way.
In February, Goyal had told Barron’s magazine that the company had carefully watched over the money of the investors and they were hoping to make profits. This was prior to the accusations of mismanagement led to the accusations of fraud.
The Trump Organization is lending its name to various developers, who are coming up with exotic complexes in India. As a result of these accusations, the name of the Trump Organization might not be involved in the controversy, as the group is not a part of the deal. However, the company is collaborating with the Trump Organization on other projects. This might create an issue in the long run.