Senior employees of Singapore property conglomerate CapitaLand Group allegedly took bribes from a longtime contractor of its projects in India, according to a lawsuit filed in the city-state.
The bribery allegations surfaced in a recent civil case brought by a Singapore construction company against a former director who oversaw its India investments. CapitaLand isn’t a party to the lawsuit, but the company is mentioned in court documents from both sides.
The court filings said some CapitaLand staffers in India received “corrupt payments” in relation to a project in Pune — which is about 70 miles southeast of Mumbai — and the real estate giant has been aware of them since at least 2023.
The project is the International Tech Park Pune, Kharadi, according to people familiar with the matter who asked not to be identified discussing non-public information.
The previously unreported saga illustrates the risks and pitfalls for international property companies trying to increase their presence in fast-growing emerging markets such as India.
Singapore, whose state investor Temasek Holdings owns CapitaLand, has also long taken pride in its strict anti-bribery stance and controls, which helped make the country one of the world’s least corrupt nations.
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CapitaLand has built a sizeable footprint in India, where it has business and logistics parks, data centres and serviced apartments. The Singapore group’s investment arm has funds under management in India totaling more than $8 billion and plans to grow that to about $15 billion by 2028.
“This matter is related to a past incident involving former employees in India in 2023,” a CapitaLand spokesperson said in response to questions from Bloomberg News. Upon discovering the incident, the company promptly investigated it and reported it to Indian police at the time, the spokesperson said, adding the case is currently under investigation.
The staffers allegedly involved also no longer work at CapitaLand.
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“CapitaLand is fully committed to conducting business with the highest ethical standards and integrity and has a zero-tolerance policy towards unethical conduct,” the spokesperson said.
Technology Park
The International Tech Park Pune, Kharadi spans 16.5 acres (6.7 ha) with three multi-storey office blocks, and is a short drive from the city’s airport. A private fund called the Ascendas India Growth Programme acquired the site in 2017. The business park commenced operations in 2023 with tenants including Hewlett Packard Enterprise, Whirlpool and Bharti Airtel.
The IT campus cost around 17.5 billion rupees ($259 million) to build, according to a 2023 press release. The Ascendas India fund, which is currently managed by CapitaLand Investment, also counts Singapore’s sovereign wealth fund GIC as a principal investor.
CapitaLand contracted an India-incorporated company called L&W Construction Pvt to work on the project. L&W — which CapitaLand previously also engaged for various other India projects since 2009 — is a subsidiary of a joint venture between two large Singapore construction firms, Lee Kim Tah and Woh Hup Holdings.
Lee Kim Tah filed a civil lawsuit in Singapore earlier this year against a former director, Edmund Cheah. He used to oversee the company’s investments in India, including in L&W, where he was also a director.
Lee Kim Tah has accused him of breaching his fiduciary duties, and is seeking to claw back over $2.1 million that was paid to him. Woh Hup isn’t a party to the case.
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Under Cheah’s watch, “L&W entered into numerous dubious transactions,” according to Lee Kim Tah’s suit, which also mentions the “corrupt payments” involving CapitaLand. The documents didn’t say how much in bribes was paid in total.
Cheah denies he breached his duties and is fighting the case. He said in his response to the suit that he always acted in the best interests of Lee Kim Tah. His lawyer didn’t reply to emails seeking comment.
Payments to CapitaLand
Former employees of CapitaLand allegedly received or asked for payments from L&W going back to at least 2019, according to people familiar with the matter.
The payments were likely made for services like work certifications and to ensure bills were paid on time, said the people, who asked not to be identified sharing confidential information.
Cheah’s filed defense said that in mid-2023, he was informed by CapitaLand of “certain serious misconduct issues involving the senior employees” of both CapitaLand and L&W in relation to the Pune project. There were allegations that a L&W executive had paid a CapitaLand employee as well as bribes to government officials, according to the Singapore court filing.
The Lee Kim Tah-Woh Hup joint venture that year appointed KPMG LLP’s India assurance and consulting business to investigate the matter and other allegations of wrongdoing at L&W, according to Lee Kim Tah’s court filing. KPMG’s findings are not public.
On one occasion, an ex-employee of CapitaLand sought additional kickbacks after receiving payments of as much as 9 million rupees, according to the people familiar. In another instance, the same former employee demanded kickbacks amounting to 1% of a contract’s value, which a L&W executive refused to pay, they said.
In Pune, police records show that several L&W employees, including a project director for the Kharadi tech park project, were arrested in 2023 and accused of misappropriating funds.
CapitaLand stopped awarding new contracts to L&W after the bribery allegations surfaced, according to people with knowledge of the matter.
The joint venture between Lee Kim Tah and Woh Hup is still operating, according to both companies. L&W is working on two remaining CapitaLand projects in India that are nearing completion, a Lee Kim Tah spokesman said. He added that the company cannot comment on the lawsuit while it is pending before the court.
