Did UP govt sign MoU with company that doesn't exist?

A Newslaundry investigation has raised questions over several high-value investment commitments announced by the Uttar Pradesh government at its 2023 Global Investors Summit, alleging that some of the entities behind the memorandums of understanding (MoUs) had little traceable corporate history or questionable financial credentials.

The investigation, published on 30 June as the first part of a series titled 'The MoU Mirage', examines a number of investment agreements that contributed to the Rs 33.5 lakh crore in proposed investments announced by the Yogi Adityanath government following the summit.

According to Newslaundry, one business group signed MoUs worth nearly Rs 1.65 lakh crore for semiconductor, display fabrication and other projects despite having "no traceable corporate record" in India. The report also questions a Rs 18,000-crore investment commitment by a company that, it says, had not filed financial statements and whose director claimed it was in the process of being wound up.

The investigation further cites an educational institution with around 600 students that signed an MoU worth Rs 40,000 crore and an NGO that entered into an investment agreement worth Rs 1,400 crore, raising questions about whether the entities possessed the financial capacity to undertake projects of that scale.

Newslaundry says its findings point to a broader pattern in the state's investment announcements, arguing that questions over investor credentials extend beyond the collapse earlier this year of the proposed Rs 25,000 crore Puch AI investment project, which had already prompted scrutiny of the state's vetting process.

The report does not allege that all investment commitments announced at the summit were fictitious. Instead, it questions the due diligence carried out before the MoUs were signed and argues that the agreements, while not legally binding commitments, have been used to showcase Uttar Pradesh's investment potential and its ambition of becoming a $1 trillion economy.

MoUs signed at investor summits generally represent expressions of intent between governments and investors and do not necessarily translate into actual investments.

Newslaundry said its investigation raises broader questions about how investor credentials are verified before such agreements are announced publicly and how much of the investment pledged at the 2023 summit has subsequently materialised.

The Uttar Pradesh government had not publicly responded to the specific findings of the investigation at the time of publication.