The agency alleges that Chidambaram received money from INX Media to manipulate a tax probe
The Enforcement Directorate (ED) has registered a case of money laundering against Karti Chidambaram, the son of former Union finance minister P Chidambaram, after taking cognizance of an FIR filed by the CBI in connection with the alleged irregularities relating to foreign direct investments received by INX Media in 2007.
The agency has registered a case on the basis of a first information report filed by the Central Bureau of Investigation (CBI) against Karti and others in the matter two days ago. ED has filed an Enforcement Case Information Report (ECIR), which is the equivalent of a police FIR, under various sections of the Prevention of Money Laundering Act (PMLA).
ED registered a case after Karti left for London on Thursday. Two days ago, CBI carried out raids at 14 locations in Delhi, Mumbai, Chennai, and Gurugram to probe the trail and use of the money allegedly received by Karti from INX to scuttle a tax probe. Both Karti and his father, P Chidambaram, said it was a "scheduled trip" and that he would return soon.
The ED will probe the allegation that Karti received money in lieu of the "services" rendered to INX Media by his company Chess Management Services, through another company, Advantage Strategic Consulting Pvt. Ltd. (ASCPL), indirectly "controlled" by him.
It is alleged that Karti received money for using his influence to manipulate a tax probe against it in a case of violation of Foreign Investment Promotion Board (FIPB) conditions to receive an investment from Mauritius.
The CBI has alleged that they recovered vouchers of Rs 10 lakh, which were allegedly paid for the services. These vouchers were issued in favour of Advantage Strategic Consulting (P) Limited, a firm indirectly owned by Karti. Also, invoices amounting to Rs 3.05 crore have also been recovered by the agency.
INX Media was seeking an investment from Mauritius, which was allowed by the FIPB board and the finance minister on the condition that only Rs 4.62 crore could be received.
For investment in INX News Pvt Ltd, a separate proposal was required. "The company violated the conditions set by the FIPB and received investment to the tune of 26 percent in the capital which included foreign investment. The company generated more than Rs 305 crore of Foreign Direct Investment in INX Media against the approved inflow of Rs 4.62 crore by issuing shares to foreign investors at a premium of more than Rs 800 per share," the FIR stated.
The violation came to the notice of income tax department in 2008 about the FIPB approval granted for Rs 4.6 crore to the INX, and a reply was sought from the company. They took the help of Chess Management Services Private Ltd, which is owned by Karti. The Chess Management accordingly sent a submission to the FIPB. On account of this, services rendered by Chess Management, INX Media paid Rs 10 lakh to Advantage Strategic Pvt. Ltd, owned by close associates of Karti Chidambaram. In addition to these payments, invoices of Rs 3.05 crore were also raised.
...& ANALYSIS
- Karti left for London on Thursday, two days after the CBI carried out searches at his home and offices across four cities for allegedly receiving money from the media firm owned by the Mukerjeas to scuttle a tax probe.
- Both Karti and his father, former finance minister P Chidambaram, said it was a “scheduled trip” and that he would return soon.
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 "Karti Chidambaram")
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