Indian authorities conducted searches at eight locations in Bengaluru as part of an investigation into potential foreign exchange violations involving the Open Society Foundations (OSF) and its investment arm, the Soros Economic Development Fund (SEDF).
According to reports from The Economic Times, the Enforcement Directorate (ED) carried out the raids under the Foreign Exchange Management Act (FEMA). The investigation centers on how foreign direct investment (FDI) funds were used by various entities and whether these complied with Indian financial regulations.
An official source noted: “Our teams carried out raids at eight locations in Bengaluru to investigate possible contraventions in FDI rules by SEDF and OSF in their investments in various entities and individuals in India.”
The reports indicate that OSF sent nearly $3 billion to over a dozen entities across India. Authorities allege that OSF was previously placed under a special category by India’s Ministry of Home Affairs in 2016, which required prior approval before making donations to local non-governmental organizations (NGOs).
Officials further claimed that to work around these restrictions, OSF established subsidiaries in India and transferred funds as consultancy fees and FDI. These funds, they allege, were ultimately used to support activities of NGOs—raising concerns of non-compliance with FEMA guidelines.
The Open Society Foundations, founded in 1999, is known globally for supporting initiatives focused on education, health, and human rights. However, according to The Times, it does not operate any direct offices within India.
The investigation is ongoing, and further details are expected as the Enforcement Directorate continues its review of financial records and transactions.
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