CBI raids: Setback to Congress, agency doesn't rule out probing ex-FM P Chidambaram's role

In a major setback to Congress leader and former finance minister P Chidambaram, the Central Bureau of Investigation (CBI) has registered a case against his son Karti for taking money from a private media company, INX Media, owned by businessman Peter Mukerjea and his wife Indrani to influence public servants. Not only this, the agency carried out raids at 14 locations in Delhi, Gurugram, Mumbai and Chennai, which include offices and residence of Karti.

Interestingly, the agency did not rule out investigating Chidambaram's role in the case as he was finance minister when the alleged irregularities took place.

On the raids being carried out at his home and officers, Karti said he has not done anything wrong. He alleged a political vendetta behind the raids against him.

"They have not seized any document and cannot prove any charge against me. I have not done anything wrong," Karti said, reacting to the CBI raids at several places linked to his father and him.

He said the raid was aimed at "silencing the voice" of his father. Chidambaram also hit out at the Centre, saying there are no allegations that involve him in the case. He said the government is using the CBI and other agencies to target his son and his friends. The former finance minister said that this is an attempt to stop him from writing "as the government has tried to do in the cases of leaders of Opposition parties, journalists, columnists, NGOs and civil society organisations".

The agency has registered a case in connection with alleged irregularities in granting the Foreign Investment Promotion Board (FIPB) clearance to INX Media, run by its directors Indrani Mukerjea and Peter Mukerjea, in 2007.

On Chidambaram's role, CBI Joint Director (Anti Corruption) Vineet Vinayak said, "We have set the process of investigation in motion with the FIR. All the people whose involvement has come forth will be examined in due course."

About searches, the officer said they have recovered mails, hard disks that need to be examined. He also clarified that the searches took place only at the residence of Karti.

He alleged that Karti-owned companies received money from INX Media for using his influence to manipulate a tax probe against it in a case of violation of FIPB conditions to receive investment from Mauritius.

"We have 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," alleged Vinayak, adding that the invoices of Rs 3.05 crore have also been recovered by the agency.

As per the FIR accessed by DNA, INX Media in its records mentioned that Rs 10 lakh was given to Advantage Strategic Consulting (P) Limited for management consultancy charged towards FIPB notification and clarification.

The agency has registered an FIR against Karti, his company Chess Management Services, the Peter and Indrani Mukerjeas, INX Media, Advantage Strategic Consulting Services, its director Padma Vishwanathan and other officials.

INX Media was seeking investment from Mauritius and the investment was allowed by the FIPB Board and the finance minister with the condition that only Rs 4.62 crore could be received. For the 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 per cent 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 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 took help of Chess Management Services Private Ltd owned by Karti. The Chess Management accordingly sent a submission to the FIPB. On account of this services rendered by the 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.

"In order to wriggle out of the situation, INX Media entered into criminal conspiracy with Karti," said Vinayak adding that the officials, by virtue of the influence exercised over them by Karti, not only ignored serious illegalities also showed undue favours by abusing their official position and advised the company to file for fresh clearance.

"The company filed a fresh request which was cleared by the finance ministry and the finance minister," Vinayak added. However, the CBI has not so far identify the officials of the FIPB .

The FIR also states that such deceitful and fallacious proposal was favourably considered by the officials of Finance Ministry and approved by the then Finance Minister.

The CBI is also investigating the role played by Karti Chidambaram in the Aircel-Maxis case, where P. Chidambaram had allegedly given an illegal Foreign Investment Promotion Board (FIPB) clearance to a Malaysian firm to buy Aircel.

The Enforcement Directorate is also probing in alleged foreign exchange violations by Vasan Health Care Pvt Ltd, its promoter Karti P Chidambaram and Advantage Strategic Consulting to the tune of Rs 2,307 crore.

CBI is also probing role Karti Chidambaram in the Rajasthan ambulance scam in which he has been named as one of the accused. There were irregularities in awarding a contract to a company, Ziqitza Health Care, for plying the ambulance services across the state in 2010 where he was independent non-executive director of the company

Karti Chidambaram

I have not read the FIR completely. Whatever I have heard only through media. It is completely bogus. I have never ever inferred in the functioning or interceded on behalf of anybody with the government of India. All the charges are completely bogus and I will stand vindicated one day," he said.

DMK president M K Stalin

I like to point out to my earlier accusation against the CBI and Income Tax department being misused by the BJP government at the centre. Former union minister P Chidambaram and his son will face the cases legally,"

Tamil Nadu Congress Committee president S. Thirunavukkarasar.

It is an attempt by the BJP government to defame the good will enjoyed by Mr Chidambaram who is in public life for a long time through such CBI raids. On issues like demonetisation, in and outside the Parliament, he has put forth his views against the BJP government. Now, just to threaten and blackmail all other opposition parties, they [BJP] are doing these kind of things.

1. INX entered into a criminal conspiracy with Karti to amicably settle a case of violation of foreign investment norms by the company in 2007. The media firm had brought in Rs 305 crore through foreign investment even as the FIPB had approved foreign inflow of only Rs 4.62 crore.

2. Karti Chidambaram exercised influence over certain FIPB officials and the department instead of investigating the case, extended undue favours to the media firm by asking it to apply for fresh FIPB approval on the downstream investment of Rs 305 crore in violation of norms. The INX Media was granted FIPB permission for the investment which had already come into the firm.

3. Karti allegedly received Rs 10 lakh from INX Media for "management consultancy charges" through Advantage Strategic Consulting (P) Ltd, a firm which was indirectly controlled by Chidamabaram. This according to CBI was done to "conceal the identity" of Chidambaram.

4. Invoices of at least Rs 3.5 crore were raised in favour of INX Group in the name of companies where Chidambaram has direct and indirect interests.

The scam

Karti’s firm Advantage Strategic Consulting is allleged to have facilitated clearances to INX Media in 2008. 
He allegedly received Rs 10 lakh from INX for “management consultancy charges”