ED uncovers George Soros-backed funding routes to Indian NGOs, flags FDI violations

The Enforcement Directorate (ED) has uncovered financial transactions linking George Soros’s Soros Economic Development Fund (SEDF) to several Indian firms, raising concerns over possible violations of the Foreign Contribution (Regulation) Act (FCRA) and Foreign Direct Investment (FDI) norms. The investigation has flagged transactions amounting to Rs 25 crore, allegedly routed as consultancy or service fees to Indian firms with ties to NGOs.

According to ED findings, SEDF, the investment arm of the Open Society Institute (OSI), provided financial assistance to three Indian firms—Rootbridge Services Pvt Ltd (RSPL), Rootbridge Academy Pvt Ltd (RAPL), and ASAR Social Impact Advisors Pvt Ltd (ASAR). The ED suspects these transactions were a cover to bypass strict regulations restricting foreign donations to NGOs operating in India.

RSPL, which received Rs 18.64 crore, reportedly used Compulsorily Convertible Preference Shares (CCPS) to justify the funds, with share values being inflated to Rs 2.5-2.6 lakh under the Discounted Cash Flow method. Investigators believe this was a "colourable arrangement" to sidestep FCRA norms, as SEDF is barred from directly funding NGOs in India without Home Ministry clearance. RAPL, established in 2019, received Rs 2.70 crore from SEDF under the pretext of "commission agent services," but the ED found no evidence of any actual services rendered.

ASAR, founded in 2016, received Rs 2.91 crore in "service fees" for activities related to public engagement and research. However, the ED suspects these payments were part of a scheme to funnel disguised donations to Indian NGOs. The investigation further traced OSI-linked investments to Mauritius-based Aspada Investment Company (AIC), which allegedly served as a conduit for routing funds into India. Aspada Investment Advisors Pvt Ltd (AIAPL), incorporated in Bengaluru, managed SEDF’s investments in India, which reportedly exceeded Rs 300 crore across 12 companies.

Interestingly, the ED noted that Lightrock Investment Advisors Private Limited (formerly AIAPL) was not formally informed about these transactions, raising further suspicions about the financial structuring behind the funding mechanisms. The probe has intensified scrutiny on foreign investments in India’s NGO sector, particularly in cases where the financial sources remain opaque.

George Soros, a global philanthropist and hedge fund manager, has long been a controversial figure due to his Open Society Foundations’ involvement in political funding worldwide. His name has been linked to allegations against the Adani Group, with the BJP accusing him of attempting to influence India’s political and economic stability. In 2023, the Organised Crime and Corruption Reporting Project (OCCRP), which has received funding from Soros-backed organizations, alleged that the Adani Group used offshore funds for insider investments, drawing criticism from government officials.

The ED’s ongoing probe into Soros-linked financial networks has reignited debates about foreign influence in India’s economic and political sectors. Officials have stated that further regulatory action may be taken based on the findings.