New Delhi: The Enforcement Directorate (ED) Tuesday raided eight locations, including the premises of a fund manager linked to Open Society Foundations (OSF) controlled by US billionaire George Soros, following the discovery of an approximately Rs 25 crore money trail leading to various non-governmental organisations (NGOs).
The searches in Bengaluru came after an investigation of suspicious transactions worth approximately Rs 300 crore involving companies that had no apparent businesses but allegedly received funds from Soros’ firms in the name of providing consultancy, sources in the ED told ThePrint.
Sources in the agency said that the Ministry of Home Affairs (MHA) in 2016 put the license of Soros’ OSF under the Foreign Contribution (Regulation) “prior reference” category, which requires any fund transfer from these donors to be cleared by the MHA before disbursement to any NGO account or even a consultant.
However, sources in the ED said the OSF found an alternative way to route funds to India for which they established shell companies and brought in money in the name of Foreign Direct Investment (FDI).
“In order to bypass this restriction, OSF had subsidiaries in India and brought in funds in the form of FDI and consultancy fees and these funds have been used to fund activities of NGOs, which is a Foreign Exchange Management Act (FEMA) contravention,” an ED official said.
The funds were transferred through the Automatic Route for FDI which does not require government approval before every transaction.
The federal probe agency has so far identified around Rs 300 crore in funding through this route since 2016, of which Rs 25 crore has been disbursed to several NGOs and their employees such as Amnesty India.
The fund manager, ASPADA Capital Advisors, which ED officials alleged is a subsidiary of a Mauritian entity, managed the flow of funds routed through Mauritius and handled disbursements to NGOs as part of the broader funding scheme for the OSF, the sources added.
“The adoption of funding through FDI instead of FCRA (Foreign Contribution Regulation Act) bypassed the approval of MHA and rather money was poured into these fictitious firms in the name of consultancy provided to Soros’ firms based in the United States,” another ED official said.
ThePrint reached the Open Society Foundations via email. This report will be updated if and when a response is received.
Soros and his firms have often been a flashpoint between the Bharatiya Janata Party (BJP)-led government and opposition parties, primarily the Congress, which has faced allegations of collaborating with Soros as well as programmes funded by him.
During the Budget session of Parliament last month, BJP MP Nishikant Dubey raised a question about the Rajiv Gandhi Foundation and Rajiv Gandhi Charitable Trust—controlled by Sonia Gandhi—receiving funding from the George Soros Foundation and US Agency for International Development (USAID) and demanded a probe by the government.
“Did USAID provide Rs 5,000 crore to Open Society Foundations run by George Soros to destabilise India? Did USAID and George Soros Foundation give money to Rajiv Gandhi Foundation and Rajiv Gandhi Charitable Trust or not? I demand that Congress should answer and a government probe be conducted,” Dubey said in the lower house amid protests by Congress MPs.
In wake of controversy in India, the OSF had on 12 February released a statement calling allegations of receiving fundings from USAID or vice-versa “manifestly false”.
“The claims that the Open Society Foundations, founded by George Soros, receive funding from USAID or direct the funding of a multibillion-dollar U.S. government agency are manifestly false. These allegations are part of a broader effort to undermine international development work and delegitimize the independent funding of civil society organizations worldwide. Open Society is a private foundation that sets its own priorities, makes its own funding decisions, and uses its own funds. We collaborate with a wide range of funders when priorities align, including other philanthropies, governments, and multilateral development agencies. Open Society is proud to stand as an ally with communities across the world in their struggles for rights and justice. We are transparent about our values and our work,” the OSF had said.
(Edited by Sugita Katyal)