Bengaluru: The Enforcement Directorate (ED) on Tuesday conducted searches at eight locations in Bengaluru as part of its probe into alleged foreign exchange violations involving the Open Society Foundations (OSF), founded by US billionaire George Soros, and its investment arm, the Soros Economic Development Fund (SEDF). The searches targeted beneficiaries of OSF and SEDF, including organizations linked to international human rights bodies and Aspada Investments Pvt Ltd, a firm allegedly managing SEDF’s investments in India.
ED Probes OSF’s Funding Network in India
According to ED sources, Aspada Investments was set up in Mauritius by OSF to channel funds into India. In 2013, it established Aspada Investment Advisors Pvt Ltd (AIAPL) in Bengaluru to manage and advise SEDF’s investment operations. The agency suspects that SEDF funded over 12 companies in India, with investments exceeding Rs 300 crore, and is now gathering evidence on the end use of these funds.
MHA Restrictions and FEMA Violations
OSF was placed under the “Prior Reference Category” (PRC) by the Union Ministry of Home Affairs (MHA) on May 30, 2016, requiring prior approval for any financial transactions with FCRA-registered organizations in India. To bypass these restrictions, OSF allegedly channeled funds into India as FDI and consultancy fees, which were then used to support NGO activities in violation of FEMA regulations, ED sources claim.
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Between 2020-21 and 2023-24, three Indian companies allegedly received Rs 25 crore from SEDF under the guise of FDI or consultancy/service fees, which the ED is investigating.
OSF’s Investment and Political Controversy
OSF describes itself as one of the world’s largest private funding organizations, supporting human rights, justice, and accountable governance. According to its website, OSF has invested over $90 million in start-ups and early-stage projects in India through Bengaluru-based Aspada Investments since 2008.
In December 2023, the BJP accused Soros of acting against India’s interests, alleging a “dangerous triangle” of Soros, OCCRP (Organized Crime and Corruption Reporting Project), and Congress leader Rahul Gandhi was attempting to “derail India’s success story.” The ED’s probe continues as it investigates the alleged misuse of foreign investments and regulatory violations linked to OSF and SEDF in India.