On 28 February 2018, the Central Bureau of Investigation arrested Karti Chidambaram, former Finance Minister P Chidambaram’s son, in connection with the INX media money laundering case.
The investigating agency arrested him at the Chennai Airport upon his return from London.
CBI stated that Karti has been evasive in the replies it has sought over a period of time, which has caused delay in concluding the investigation.
Sources have alleged that more evidence has been found against Karti taking bribe and a bigger amount of money changing hands.
Let us first try to understand all about the case and the allegations involved.
Who Is Karti Chidambaram?
Karti P Chidambaram is a businessman and a member of the Indian National Congress and the All India Congress Committee.
His father is Palaniappan Chidambaram, who has served as India's Minister of Finance and Minister of Home Affairs, and has been a Rajya Sabha MP since July 2016.
Karti Chidambaram studied business management at the University of Texas at Austin and law at the University of Cambridge. When he returned to Tamil Nadu after his graduation, P Chidambaram had broken away from the Congress and formed his own political party called Tamil Maanila Congress. Karti Chidambaram joined the party and served as his father’s election manager. In 2014, Karti Chidambaram contested from the Sivaganga Lok Sabha constituency and lost.
In 2015-16, reports came out exposing his ownership of a sprawling international network of companies. Both father and son have refuted all claims and have said that there is no proof of them being involved in any illegal trade or corrupt practices.
What is the INX Media Case?
In 2007, INX Media, which was owned by Peter and Indrani Mukherjee, received a foreign investment of over Rs 300 crores. The firm needed clearance from the Foreign Investment Promotion Board (FIPB).
The FIPB, in a meeting on 18 May 2007, recommended the proposal of INX media. However, the board did not approve a downstream investment of 26 percent in the capital of INX News Pvt Ltd. The FIPB regulations allowed INX Media to receive only Rs 4.62 crores. But they violated the conditions and raised foreign direct investments worth Rs 305 crores at a premium of over Rs 800 per share.
Enter Karti Chidambaram.
In February 2008, the Income Tax Department questioned the transaction which was not in compliance with the policies and procedures of Foreign Direct Investment (FDI) laws in India. The FPBI had also sought clarification.
That is when, “to wriggle out of the situation without any punitive action, INX Media entered into a criminal conspiracy with Karti,” an FIR in the case reads.
INX Media had tried “to get the issue resolved amicably by influencing public servants of FIPB unit of the Finance Ministry by virtue of his (Karti) relationship with the then Finance Minister (P Chidambaram).”
Karti allegedly had a hand in getting the FIPB to overlook illegalities on part of INX Media company. The CBI alleges that he received money from the company for influencing the approvals and to manipulate a tax probe.
P Chidambaram was then the Union Finance Minister and head of Foreign Investment Promotion Board (FIPB).
CBI Files FIR For Corruption Charges
In May 2015, CBI filed an FIR against alleged irregularities and corruption in the FIPB clearances.
The investigation agency claimed they had recovered vouchers that were proof that an amount of Rs 10 lakh was given to Advantage Strategic Consulting (P) Limited, a firm "indirectly" owned by Karti. The invoice read "in the name of M/s/ASCPL [which Chidambaram was the director of] for the services rendered by Chess Management Services" was raised on INX Media "with a view to conceal the identity of Karti."
Karti and the Mukerjeas were booked on charges of criminal conspiracy, cheating, receiving illegal gratification, influencing public servants and criminal misconduct.
P Chidambaram was named in the FIR, but not listed as one of the accused persons.
Enforcement Directorate Probes Money Laundering Allegations
An initial probe was conducted by the Enforcement Directorate (ED) and after the FIR was filed, they filed charges under the Prevention of Money Laundering Act (PMLA) for diverting foreign direct investment by three Mauritius-based companies in INX Media to its subsidiaries without prior approval of the FIPB.
New Vernon Private Equity Limited, New Silk Route (NSR) PE Mauritius, and Dunearn Investment (Mauritius) were the three companies involved with INX Media.
When the tax history of the INX group was dug up, it revealed that the Mukerjeas were involved in laundering Rs 305 crore through Mauritius into 8 different INX subsidiary companies (between 2007-2008).
Raid After Raid After Raid
Just a day after the FIR was filed, CBI raided over 14 places linked to the Chidambarams as part of an inquiry into suspected criminal misconduct.
Since then, the CBI and ED have carried out a string of raids on the houses and offices owned by them.
In the past, a lookout notice, which alerts airports to stop a passenger from traveling abroad, was issued against him. The agencies suspected that he would try to close the foreign accounts where he had parked the money from the kickbacks. In November, the Supreme Court allowed Karti Chidambaram to go to the UK for his daughter's admission to Cambridge University.
Just last week, P Chidambaram had approached the Supreme Court seeking protection of his fundamental rights, including the right to privacy, amid summons to his son Karti Chidambaram and raids in connection with the INX Media and Aircel Maxis cases.
The Chidambarams have denied all allegations, calling it 'political vendetta'.
Karti's Accountant Arrested a Fortnight Back
On 16 February 2018, Karti Chidambaram's chartered accountant S Bhaskararaman was arrested from a five-star hotel in Delhi.
A special judge sent him to Tihar Jail after he was produced from the custody of the Enforcement Directorate (ED).
The ED claimed that Bhaskararaman had been assisting Karti to manage his "ill-gotten wealth" in India and abroad, as NDTV reported.
Bhaskararaman has now filed a bail plea.
'Political Vedetta' Against the Chidambarams?
As soon as the news of the arrest broke out, the Congress lashed out, saying that the arrest was "vindictive politics" and a "classic diversionary tactic of the government to hide their own corrupt governance model that is being exposed on a daily basis.”
Tamil Nadu opposition party DMK’s spokesperson, Saravanan, termed this arrest as BJP's attempt to manage headlines. “BJP is unable to handle the heat of the Nirav Modi fraud case,” he said.
Meanwhile, Rajya Sabha member and senior BJP leader Subramanian Swamy has claimed that all the FIPB (Foreign Investment Promotion Board) clearances that were given by P Chidambaram, during his tenure as finance minister, are under scrutiny.
He said that there are 25 such cases and the trail will ultimately lead to P Chidambaram. “All this corruption happened because Chidambaram approved projects which should not have been approved like Aircel-Maxis, INX Media. Therefore, the trail will lead to P Chidambaram,” he said.
BJP Spokesperson Sambit Patra has brushed aside all allegations, saying that this is just law enforcement and not vendetta. “No one should consider oneself above law of the country. If corrupt are being jailed and law is taking its course, I see no reason why any political party should cry vendetta,” he said.
Senior lawyer Prashant Bhushan said that Karti’s arrest isn’t justified. ‘To arrest him during investigation, without a chargesheet, since there is no danger of his fleeing the country. This show, while big fish like NiMo, Mehul bhai & Mallya are allowed to loot & scoot,” he tweeted.