Press Release / News & Society / NRI investors claim USD103 million damages from ICICI

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. ICICI Venture was also appointed as the investment manager of IAF in February 2005. A team of experts in the business of real estate was made responsible for execution of the projects.

ICICI Bank and ICICI Venture approached investors, located in a number of countries including the United Arab Emirates, Kuwait, Qatar, Bahrain, Oman (GCC countries), USA, UK, East Africa and Singapore, Hong Kong and Japan in April 2005 to invest in its project which consisted of the launching of a dedicated real estate fund, called the India Real Estate Fund. The Fund was promoted to be a close-ended fund with a corpus of USD 220 mm and the Fund was to have the primary objective of developing, leasing, owning and selling quality office buildings, residential premises and retail spaces that were attractive to quality tenants/users and appeal to long term institutional investors.

The Project was marketed mostly using the name and prestige of ICICI Bank and promotional campaigns for the marketing of the Project was personally affected by the CEO and top management team of ICICI Bank. The promotion of DIF III relied heavily on the exceptional returns of a similar previous fund, DIF II, which were used as a benchmark for future performance potential, the complaint filed in Mauritius said. Hundreds of foreign and mostly NRIs who had trust in the foremost bank in India got duped into investing in DIF III, petitioners now regretted.