The Enforcement Directorate (ED) recently conducted searches at eight locations in Bengaluru as part of its investigation into alleged violations of the Foreign Exchange Management Act (FEMA) involving the controversial funding agency Open Source Foundation (OSF) and its investment division, Soros EDF, led by U.S. billionaire George Soros.
According to initial findings by the agency, the Ministry of Home Affairs (MHA) designated OSF under the ‘Prior Reference Category’ in 2016. This classification prohibited the organization from making unregulated donations to non-governmental organizations (NGOs) in India.
ED sources allege that to circumvent these restrictions, OSF established subsidiaries within India and funneled funds through Foreign Direct Investment (FDI) and consultancy fees. These funds were reportedly used to support the activities of various NGOs, constituting a violation of FEMA regulations.
OSF, recognized as one of the largest private donors to groups advocating for human rights, justice, and accountable governance, had a budget exceeding $1 billion in 2020, as indicated on its website.
The organization first engaged in India in 1999, primarily providing scholarships and fellowships to students pursuing studies and research in Indian institutions. In 2014, it launched a dedicated grant-making initiative aimed at supporting local organizations focused on three key areas: enhancing access to healthcare, promoting justice system reforms, and establishing rights and community services for individuals with psychosocial disabilities.
Since 2008, OSF has invested upwards of $90 million in start-up and early-stage funding projects managed by Aspada Investments, based in Bangalore. However, the organization noted that its grant-making activities in India have faced limitations due to government-imposed funding restrictions on local NGOs since mid-2016.
The Bharatiya Janata Party (BJP) has targeted George Soros, a Hungarian-American philanthropist and political activist, accusing him of financially supporting Opposition parties and initiatives aimed at destabilizing Prime Minister Narendra Modi’s government. The ruling party has also alleged that the former Biden administration collaborated with Soros to undermine Modi.
