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The case that led to Chidambaram's downfall

August 22, 2019 22:45 IST

IMAGE: CBI officials bring Congress leader and former finance minister P Chidambaram to produce him at the CBI court in connection with the INX Media money laundering case, in New Delhi, on Thursday. Photograph: Ravi Choudhary/PTI Photo

The INX Media case, in which former Union minister P Chidambaram has been arrested by the Central Bureau of Investigation, pertains to allegations of bribery by the company's promoters -- Peter and Indrani Mukerjea -- to get foreign investment clearances.

The couple are in jail for allegedly killing Indrani's daughter from an earlier marriage. Indrani turned approver in the INX Media case and gave a testimony against Chidambaram, which largely forms the basis of the CBI case against the former finance minister.

Founded in 2006 by the Mukerjeas, INX Media made an application seeking clearance to a foreign investment proposal on March 13, 2007.

 

The application was made to the chairman of the Foreign Investment Promotion Board (FIPB) -- an erstwhile inter-ministerial body that was responsible for processing foreign direct investment (FDI) proposals.

Chaired by the Economic Affairs Secretary, the FIPB had other permanent members, including the secretaries of the Department of Industrial Policy and Promotion (DIPP), Commerce, Economic Relations in the ministry of external affairs and overseas Indian affairs.

The company had proposed to get FDI worth Rs 4.62 crore, which was cleared by the FIPB with an approval from then finance minister Chidambaram.

But in violation of the conditions, the company received Rs 305 crore with a premium of Rs 800 per share.

The investment raised suspicion, prompting the Income Tax (I-T) department to issue a letter to the FIPB, demanding a probe in the matter.

The board told the I-T department that the matter was verified and also sought clarifications from INX Media.

In order to 'wriggle out' of a situation that could have led to punitive action, the company entered into a 'criminal conspiracy' with Karti Chidambaram, the minister's son and the promoter of Chess Management, to get the issue addressed 'amicably by influencing' public servants in the FIPB, according to a first information report  filed by the CBI.

INX Media was advised by the FIPB to file a fresh application for the downstream investment already made in the company.

The request of the I-T department to probe the matter was also scuttled, the central agency has alleged.

The finance ministry not only granted fresh proposals, but also 'misinformed the investigation' being conducted by the I-T department, the CBI has alleged.

It has further alleged that an amount of Rs 10 lakh was paid to Advantage Strategic Consulting Private Limited (ASCPL) for management consultancy charges towards the FIPB notification and clarification.

The company also generated invoices of Rs 3.5 crore towards INX Media.

According to CBI, Advantage Strategic is indirectly controlled by Karti, which has been strongly denied by him and his father.

Chidambaram has not been named as an accused in the FIR and the CBI is yet to file a chargesheet in the matter.

The senior Congress leader has denied the allegations against him.

He had also appeared before the agency last year after notices were issued to him.

Meanwhile, Indrani, who was named as one of the accused in the FIR, turned approver in the case and alleged that she had met Chidambaram in his office and later his son in a five-star hotel in south Delhi, where she was asked to pay Karti in a foreign bank account.

Indrani was already facing a CBI probe, along with her husband Peter, for allegedly killing her daughter Sheena from her first marriage and burning her body in a forest in Maharashtra.

Probe into 2016 Aircel-Maxis deal led ED to INX Media case

The alleged irregularities in the grant of FIPB approval to INX Media first came to light in 2016 when the Enforcement Directorate was probing a similar approval given by the Union finance ministry in the Aircel-Maxis deal.

The Aircel-Maxis deal is an offshoot of the 2G spectrum allocation case and bears resemblance to the INX Media case.

According to official records, the ED was looking into the role of ASCPL in the Aircel-Maxis case when the firm's footprints were seen in other similar deals approved by the finance ministry.

Both INX Media and Aircel-Maxis deal cases are being probed by the ED and the CBI for alleged corruption and money laundering.

In December, 2016, the ED's then joint director (headquarters) Rajeshwar Singh wrote a letter to the then CBI director informing him about unravelling of some new evidences while his team was probing the Aircel-Maxis deal case.

It is after this letter that the CBI filed a criminal case in the INX Media deal on May 15, 2017.

Three days later, the ED took cognisance of the CBI FIR and filed a case under the Prevention of Money Laundering Act (PMLA).

The letter stated that probe has revealed that ASCPL received funds 'in the guise of consultancy charges from some more companies and individuals that have received FIPB approvals from the Ministry of Finance'.

It also stated that documents recovered from a seized hard disk from the premises of ASCPL disclosed that INX Media paid 'a sum of Rs 9,96,296 to ASCPL vide a cheque number 002914 dated July 15, 2008'.

The letter also said that the ED has recorded the statements of the managing director and chief financial officer of INX Media who confirmed that such a payment was made.

'The record of payment clubbed with the statement of the MD and CEO of INX Media Pvt Ltd clearly indicates that this payment was not made for any services provided by ASCPL.

'On the contrary, the records also indicate that just after the issue of the cheque, FIPB approval was granted to INX News Pvt Ltd (a group company of INX group) by the Finance Ministry on November 11, 2008,' the ED officer's letter to the CBI said.

INX Media, it said, had got FIPB approval on May 31, 2007.

Turn of events in INX Media case

May 15, 2017: The CBI registers FIR in the INX Media case alleging irregularities in FIPB clearance to the group for receiving overseas funds of Rs 305 crore in 2007. Thereafter, the ED lodges a money laundering case in this regard.

Feb 16, 2018: The CBI arrests son of former finance minister P Chidambaram, Karti Chidambaram, from Chennai airport.

March 23: Karti gets bail from the Delhi high court.

May 30: P Chidambaram moves the Delhi HC seeking anticipatory bail in the corruption case lodged by the CBI.

July 23: He moves the HC for anticipatory bail in the money laundering case lodged by the ED.

July 25: The court grants him interim protection from arrest in both the cases.

Jan 25, 2019: The court reserves its judgement on his anticipatory bail in both the cases.

July 11: Sheena Bora murder accused and INX Media owner, Indrani Mukerjea, turns approver in the case.

Aug 20: HC dismisses the anticipatory bail pleas of P Chidambaram. It also declines his request to stay the order for three days to enable him to move an appeal in the Supreme Court.

Aug 21: P Chidambaram files appeal against HC judgement in the SC. His lawyers try to get the matter listed for hearing on the same day. However, SC refuses urgent listing and the matter is listed for hearing on August 23. The CBI arrests the Congress leader at night.

Aug 22: P Chidambaram produced before a Delhi court which sends him to four-day CBI custody.

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