NRI investors sue ICICI Venture for damages
ICICI Venture is being sued by a group of 69 non-resident Indian investors who are seeking $103 million in damages from over alleged losses from a property fund run by the GP.
According to Reuters, the investors claim that their losses were sustained from investments in the Dynamic India Fund III. The group say that, as of March this year, only one of the 13 Indian real estate projects backed by the fund had been completed in the nine years since the vehicle was launched.
ICICI Venture - a unit of India's ICICI Bank - dismissed the allegations as "totally baseless", saying it would take necessary steps to respond to proceedings.
The group - which originally filed the lawsuit in July - further claim that the fund invested in real estate projects "that flopped miserably, instead of world class ones as the marketing teams promised." They accuse the fund of neglecting its due diligence, under-estimating cost and completion time of projects, and of engaging in "overt manipulation of the finances" to escalate costs.
Respondents to the claim - which is being heard at the Supreme Court of Mauritius - include ICICI Bank, the Dynamic India III fund trustee Western India Trustee and Executor Co, as well as the fund administrator International Financial Services.
ICICI Venture noted it had extended the lifespan of the Dynamic India Fund III by three years and offered investors a cash exit option that was in line with global best practices.
"The allegations levelled by a set of investors, constituting only 12% of the investors in the concerned funds, are totally baseless, not supported by facts and are malicious," ICICI Venture said in a statement. "It is common knowledge that globally PE as an asset class does not guarantee returns given the equity risks involved. Also, projects in real estate have a long gestation period and hence the returns accrue over a period of time."
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