Update
Sequoia Capital has denied reports that the searches by the Enforcement Directorate (ED) had anything to do with the Aircel-Maxis scam and that they pertained to the venture firm's investments in Vasan Healthcare.
"Sequoia Capital India first came to know of a regulatory investigation into Vasan Healthcare through a newspaper article on 17th Sept, 2015 and took a few prompt steps - VT Bharadwaj, a Managing Director of Sequoia Capital India Advisors Private Limited, who was Sequoia Capital India's nominee on the Vasan Healthcare Board of Directors, demanded that management of Vasan Healthcare conduct a thorough investigation into the allegations. Subsequently, VT Bharadwaj resigned from the board of Vasan Healthcare on 18th November 2015," the firm said in a statement.
"Contrary to media reports, Sequoia Capital India has absolutely no association with companies like Aircel or Maxis. Our only connection to the ED visit is that Sequoia Capital India is a minority investor in Vasan, which is one out of the 100+ investments made in India over the last 10 years," it added.
Original story
Sequoia Capital's offices in Bengaluru (Bangalore) were searched on Tuesday by the money-laundering investigation wing of the Indian finance ministry for alleged violation of foreign exchange norms. The venture capital firm allegedly misused India's foreign direct investment (FDI) policy, CNN News 18 reported, citing sources.
The Enforcement Directorate (ED) raided the firm's Bengaluru offices on Monday also, according to a tweet by Sequoia India.
The ED is also believed to have searched Westbridge Capital, a company linked to Karti Chidambaram, son of Congress politician and former finance minister P Chidambaram.
Aircel is an Indian mobile network operator in which Malaysian mobile network company Maxis has a 74 percent stake.
"In 2006, Aircel was acquired by Malaysia's biggest integrated communications service provider Maxis (Maxis Communication Berhard) and is a joint venture with Sindya Securities & Investments Pvt Ltd- Maxis holds 74% equity in the company," according to Aircel website.
The acquisition of the stake by the Malaysian firm became a controversy after Aircel owner C. Sivasankaran complained with the Central Bureau of Investigation (CBI) in April-May 2011 alleging he was forced to sell his stake to Maxis, the Hindu reported last year.
Last August, the ED attached assets estimated at Rs. 742.58 crore of former Telecom Minister Dayanidhi Maran and his brother Kalanithi Maran and wife Kaveri Kalanithi in the Aircel-Maxis deal case. Dayanidhi Maran allegedly received "illegal gratification" from Maxis.
The ED's move to search Sequoia Capital's Bengaluru offices has been criticised by former Infosys CFO Mohandas Pai, who also invests in start-ups through his firm Aarin Capital Partners. "My first thought is that may be ED should have issued a notice and asked for information from Sequoia instead of going for a raid," he told CNBC-TV18.
2/3:Sequoia has adopted a policy of full compliance with that investigation & has dutifully responded to governmental inquiries recd to date
— Sequoia_India (@Sequoia_India) April 19, 2016
