Hades Financial, which claimed to be an asset manager headquartered in Riyadh with a significant focus on India, has come under the radar of fund managers in the country following severe allegations of fraudulence in the media.
The firm has turned out to be “an elaborate con”, a MorningContext report cited on Tuesday, highlighting several aspects that the firm claimed about itself – including its official address registered on the website – are untrue.
“No such fund is incorporated out of Saudi Arabia or operates out of the 56th Floor of Kingdom Center Tower in Riyadh. Its address in Lausanne, Switzerland, is not an office but a residential building of 10 luxury apartments. No office of Hades Financial exists on the 22nd floor of 55 Water Street in New York,” the Morning Context report stated.
Meanwhile, PE-VC firms that DealStreetAsia has spoken to have said that they have been on guard and are doing their due diligence to check the veracity of the allegations.
Earlier this year, Hades Financial claimed to have committed capital to two sector-specific funds – Somerset Indus Capital Partners in the healthcare space and fintech-focused Cedar-IBSi Capital. Together, it was a $28-million commitment. Besides, the firm is also said to have backed Endiya Partners and reportedly has been in talks with Tribe Capital for a proposed investment.
In earlier media interviews, Mohammed Abrar Asif, who claims to be the co-CEO at Hades Financial, had stated that the firm is betting big on India and that it has earmarked over $500 million for PE and VC investments in the country over the next two to three years. He had also claimed that Hades was backed by some of the world’s largest sovereign wealth funds such as the Public Investment Fund (PIF), Kuwait Investment Authority (KIA), and Oman Investment Authority (OIA), among others.
In all, Hades Financial signed commitments with at least six different funds, totalling an investment of anywhere between $70 million and $100 million, stated the Morning Context report.
When contacted by DealStreetAsia, Asif, who has deactivated both his LinkedIn and Twitter accounts, said: “We are free to use whatever addresses and whatever entities we want to fulfill our obligations to the commitments we have made.”
There is reportedly no trace of the firm’s employees either. According to the Morning Context report, Hades claimed to have a headcount of 25 employees. “However, none of them can be found anywhere and it seems like a made-up number, very similar to its made-up history,” the report stated.
While Hades Financial claims to have invested over $150 million in Indian fund managers since 2016, it does not have much of a mention anywhere on search sites, his recent claims being the media interviews.
According to lawyers that DealStreetAsia spoke to, typically in such cases where there have been misrepresentations, legal recourse can be taken only if there is any financial loss.
This is a wake-up call for the PE-VC industry, according to several fund managers. “Stricter due diligence is needed even for funds and not companies alone,” said one India-based GP.
