Monday, 25 July 2016
Last updated 15 min ago
Mar 28 2012 | 12:06pm ET
The Children's Investment Fund has kept a relatively low profile in recent years. But no more: The activist hedge fund has sued the world's second-largest country.
London-based TCI yesterday formally accused the Indian government of violating trade treaties between it and the U.K. and Cyprus, where TCI's funds are domiciled. In doing so, TCI has joined the fray over a corruption scandal embroiling India's government, after the country's comptroller and auditor-general accused the government of selling coal assets at a steep discount to some of India's top businessmen.
According to TCI, those sales—which the comptroller said could have cost the company US$211 billion—"seriously impaired the business activities and operations" of Coal India, of which the hedge fund owns 2%. The Indian government owns 90%.
TCI alleges the government ordered Coal India to make the discounted sales.
TCI said the letter, which India's coal secretary says he has not received, gives the two sides six months to settle the matter before international arbitration.
"We tried to do it the soft way," TCI's Oscar Veldhuijzen told the Financial Times. "We tried to do it in a very constructive way and all we got was us being ignored and the board following the instructions of the government."