NRI investors claim USD103 million damages from ICICI
Alleging that they suffered huge losses on their investments made in Dynamic India Fund lll (DIF III), a group of 69 NRI investors from about amongst 500 have dragged ICICI and associated companies to the Mauritius Supreme Court. The petitioners alleged that DIF lll, promoted by ICICI ventures and ICICI Bank, invested in real estate projects that flopped miserably, instead of world class ones as the marketing teams promised. “A plaint with summons was lodged before the Supreme Court of Mauritius by a group of NRI and foreign investors against (DIF III), International Financial Services Ltd (IFS), ICICI Venture Funds Management Company Ltd (ICICI Venture), ICICI Bank and the Western India Trustee And Executor Co Ltd,” the legal firm handling the case, Banymandhup Boolell Chambers, said. Explaining the losses suffered by the investors, the investors said ICICI invested in 13 projects in India of which three properties in Hyderabad and two in Mumbai together consumed approximately 60% of the corpus despite the original promise that ICICI Venture were to spread its investments to projects in various cities across India. Even after completion of nine years of the investments was made, except for one, none of these were completed as stated in their Report of March, 2014. Work on a township project in Chennai, in which the Fund invested, has not even commenced after 9 years due to serious infrastructure problems. Two or three projects are in dire financial liquidity problems. Only one project in Pune has been exited after eight years and that too considerably under- performed from projected growth, the investors said. “Thus, it is a classic case of total neglect of due diligence, research of suitability taking into account of exit term, outrageous underestimation of cost and completion, alleged negligence and overt manipulation of the finances for escalating costs and serious blunders in judgment of selection of projects ” the petitioners aver. The investors are claiming for a judgment condemning and ordering DIF III, IFS, ICICI Bank and ICICI Venture to pay jointly, severally and in solido the sum of USD 103,699,976, together with interests, which comprise the capital investment made by the investors in DIF III and the moral damages. DIFIII is a public limited company with limited life, incorporated in Mauritius on the 14th April 2005, and holds a Global Business Licence Category 1, issued by the Financial Services Commission of Mauritius, a regulatory government body. DIFIII is managed by IFS, a management limited company incorporated in Mauritius, who acted as Administrator of DIF III apart from being Secretary. Directors and share holders of IFS also acted as directors of DIF III with conflicting interests. DIF III was promoted and set up by ICICI Venture and ICICI Bank, as a special purpose vehicle for overseas investors to invest through IAF III, in the real estate market in India. Western India is the trustee of IAF III and ICICI Venture is the settlor of IAF III.