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Donald Trump India partner tied to PM Modi sees no conflict of interest

LiveMint logoLiveMint 20-06-2017 Stephanie Baker

London: As President Donald Trump prepares to host Prime Minister Narendra Modi in Washington next week, his business partner in India is gearing up to sell high-priced condominiums at Trump Tower Mumbai.

While the timing may be coincidental, it points to possible conflicts of interest: Trump continues to profit from a business deal with India’s largest real estate developer, who has close ties to the ruling Bharatiya Janata Party (BJP).

The developer, Mangal Lodha, the founder and major shareholder in the Lodha Group, is a senior party figure in the state of Maharashtra. His political manifesto echoes a familiar slogan: “Making Mumbai great again.”

Lodha’s son, Abhishek, who took over running the family business in 2010, says he sees no conflict because Trump hasn’t been involved with the company since he entered the White House. Lodha paid Trump as much as $5 million for the licensing deal on the Mumbai development, according to the president’s financial disclosures.

“There cannot be any conflict of interest in relation to his association with us,” Lodha said in an interview in London. “Mr. Trump becoming president and the Trump’s organization relationship with us are completely independent, and any attempts to link the two are not grounded in facts.”

In January, Trump handed over management of his company to his two older sons but refused calls to divest. Critics of the president frequently complain that this unprecedented arrangement is problematic because it can create doubt about whether the president is putting his interests ahead of the nation’s. Trump’s dealings with Modi illustrate this potential collision between his priorities as a businessman and his decisions as president.

Special treatment?

As Trump and the US state department negotiate with India, his company is accepting payments from business partners with ties to the Indian government. That raises questions about whether Trump stands to profit from his foreign policy decisions, and also whether Indian authorities will give special treatment to the president’s Indian business partners to win his favour.

Three lawsuits now accuse Trump of violating the US constitution by accepting payments from foreign governments and state officials.

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Both the White House and the Trump Organization declined to comment for this story.

Modi is due in Washington next Monday for his first face-to-face meeting with Trump, a politically charged visit likely to be dominated by the president’s decisions to pull out of the Paris climate accords and tighten rules for letting foreign workers into the US, which will affect Indian companies and outsourcing firms.

Resuming sales

Lodha says he plans to resume sales of luxury condos at the 75-story Trump Tower Mumbai at the end of the month. He says the development, overlooking the Arabian Sea, is 60% sold and due for completion in 2019. He halted condo sales in November when Modi banned high-denomination notes to reduce corruption, a move that had a chilling effect on real estate. Lodha said demand has bounced back, with February-April turning out to be the strongest three-month sales stretch ever for the company.

“We don’t plan our business based on who’s meeting whom,” he said.

Lodha is building one of three Trump-branded properties in India. In addition to Mumbai, a Trump Tower in the western city of Pune is being built by Panchshil Realty and another Trump Tower in Gurgaon southwest of New Delhi is being constructed by IREO Realty.

Lodha says he first got to know Trump in 2013 and it never occurred to him or his family that Trump would one day be president.

Lodha, a privately-held family-owned company, has invested hundreds of millions of pounds into two luxury residential developments in London, its only commitment outside India. The company is planning to sell shares in an initial public offering in 2018.

‘Role model’

Mangal Lodha is vice president of the BJP and a member of the legislative assembly, known as an MLA, for Maharashtra, India’s second-most populous state, which includes Mumbai. On his website, Mangal Lodha includes several pictures of himself with Modi, whom he calls his “role model.”

“MLAs are really powerful—it’s not like a US state assembly,” said Shailesh Kumar, a senior Asia analyst in New York at Eurasia Group, who said he doesn’t know the Lodhas personally. “If you’re the vice president of a party that’s ruling a given state, by default you’re going to have a load of influence over decision-making.”

Mangal Lodha’s manifesto takes a page from the Trump doctrine: “Our plan for making Mumbai great again? Listening to you first.” He goes on by saying Modi’s election in 2014 meant “a new government that makes promises and actually delivers.”

Trump called India a “true friend and partner in addressing challenges around the world” after a call with Modi in January, one of the first heads of state he spoke with upon taking office. Earlier this month, when announcing the US would be pulling out of the Paris climate accords, Trump singled out India for demanding “billions and billions and billions of dollars in foreign aid from developed countries” as its condition for participating in the agreement. India’s Foreign Minister Sushma Swaraj said there was “no reality” in what Trump had said and that India signed the Paris agreement because of a commitment to protect the environment. Bloomberg

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