The ethical problems and accusations of corruption which are shaking the Indian subsidiaries of the Caisse de dépôt et placement du Québec worry the Legault government and the official opposition, which is demanding “more transparency”.
Posted at 4:38 p.m.
Updated at 7:16 p.m.
“The whole issue is concerning and yes, we are asking questions to the managers and the board of directors on this subject,” said Claudia Loupret, director of communications for the Minister of Finance Eric Girard, responsible for the Caisse.
She reacted to the investigation of The Presswhich revealed Tuesday that Quebecers’ nest egg had received, from 2022, information on serious ethical problems in its subsidiaries in India.
Our report explained that several red flags were aimed at the director of the Fund in this country, Saurabh Agarwal. This manager would then leave the organization under unclear circumstances in 2023, before being accused of corruption in New York with two of his colleagues last October.
Read “Corruption in India: Several Red Flags”
The Quebec retirement plan manager has confirmed that ethics reports received in 2022 have indeed been sent to its Montreal head office. He goes over some of them with a fine-tooth comb.
“The Caisse must maintain the highest standards in terms of governance, ethics and compliance,” insists Claudia Loupret, without however specifying which aspects of the file Quebec had questioned the Caisse.
The red flags mentioned The Press Tuesday come from a former legal affairs manager employed by the Caisse’s main Indian subsidiary, CDPQ India Private Ltd (CDPQ India).
According to her, Agarwal notably wanted to use CDPQ India funds to finance the school his own son attended. He also allegedly attempted to hire a friend’s law firm as part of a major transaction, in addition to pressuring subordinates to modify the subsidiary’s financial data.
When the ex-employee began to sound the alarm in 2022, Azure Power Global, an Indian solar energy producer controlled by the Quebec institution, was embroiled in a corruption scandal with the three executives of the Caisse, according to US prosecutors.
In 2023, other allegations targeted Maple Highways, another Indian subsidiary of the Caisse which operates private highways.
-The opposition demands accountability
Governance issues at the Caisse also concern the official opposition.
“How come there is not more knowledge of responsibilities up to the head office? » asks the Liberal finance spokesperson, Frédéric Beauchemin.
There we talk all the time about branches far away in India, about the world at a distance from the Caisse de dépôt office here in Montreal… But the Caisse’s operations are centralized in Montreal… At one point, there are someone who should be in the hot seat…
Frédéric Beauchemin, Liberal MP
For the MP, the setbacks of Quebecers’ nest egg with Azure and Maple Highways demonstrate that the financial institution has difficulty pulling the strings itself in these markets. “It is clear that in these cases, it was clearly not to the Caisse’s advantage. »
At the Institute on the Governance of Private and Public Organizations (IGOPP), director François Dauphin adds. “This demonstrates the nuance between being an operator and an investor,” summarizes the director of the organization. It’s a fundamentally different mission to operate [être aux commandes d’une compagnie] and invest. »
Read “Company control: the Fund is playing with fire”
According to him, the file demonstrates the difficulty of applying codes of ethics uniformly in all the markets in which the Caisse invests. “There is a lesson to be learned from these investments which make us play the role of operator. »
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- 2016
- Year when the nest egg of Quebecers opened its office in the Indian capital New Delhi.
Caisse de dépôt et placement du Québec