Hedge Funds Go on Attack In India

After years of complaining about poor treatment as minority investors in India's publicly traded companies, some Western hedge funds are turning to activist tactics that have not often been tried here.

The recent moves may mark the beginning of a more confrontational period between foreign investors and Indian companies, which tend to be owned by either their founders or the government.
Last week, the U.K. hedge fund The Children's Investment Fund Management LLP, which has $9 billion in assets and is famous for its tussles with companies, initiated legal proceedings against the Indian government to protect its investment in India's largest coal-producer, Coal India Ltd.
The fund on March 27 sent a notice to India's coal ministry alleging that government orders to charge low coal prices are hurting Coal India's profitability and thus harming TCI's investment. The fund alleged that the orders are a violation of a treaty between India and the U.K., which provides that investments from both countries be afforded fair and equitable treatment.