Former Finance Minister P Chidambaram’s son Karti Chidambaram has been accused of influencing public servants to help INX Media escape scrutiny and receiving payments in return.
The Central Bureau of Investigation (CBI) court on Wednesday gave investigative agencies one-day custody of Karti Chidambaram, son of former Finance Minister P Chidambaram, in relation to the INX Media case.
Karti had been arrested earlier on Wednesday morning in Chennai upon his arrival from a foreign visit. He was flown to Delhi later in the day by the CBI.
"This whole exercise is to politically target my father," Karti wrote on the arrest memo before signing it.
Investigation agencies said that Karti Chidambaram was arrested following a statement given by accused Indrani Mukerjea. In the statement, Mukerjea had alleged that P Chidambaram, while he was still the finance minister, had asked her and her husband Peter Mukerjea to help his son’s business.
The statement was recorded by the CBI under Section 164 of the CrPC. Indrani Mukerjea alleged that a deal of USD 1 million was struck between Karti Chidambaram and them to get FIPB approval in favour of INX Media, a company the Mukerjeas had set up.
The Foreign Investment Promotion Board (FIPB) was an agency under the Central government, which would remit to consider and recommend Foreign Direct Investment (FDI) that did not come under the automatic route. FIPB was abolished in May 2017.
INX Media Case
The finance ministry had received an application from INX Media for a FIPB approval in March 2007. In a meeting in May that year, FIPB recommended the proposal of INX media.
However, it did not approve INX Media’s investment in INX News. The FIPB also allowed an FDI inflow of only Rs 4.62 crore for INX Media.
As per the First Information Report (FIR) filed by the CBI, INX Media deliberately violated conditions and made investments of up to 26 percent in INX News, which was against FIPB’s approval.
Also, Rs 305 crore of FDI was generated in INX Media by issuing shares to foreign investors at a premium of more than Rs 800 per share, while FIPB had only approved an amount of Rs 4.62 crore.
The investigative agency alleged that FIPB officers ignored these violations by INX Media and deliberately showered undue favours, under Karti Chidambaram’s influence. The officers also allegedly ignored a request from the revenue department seeking an investigation.
According to the CBI, INX Media tried to protect itself and influence FIPB’s public servants by using Karti Chidambaram by virtue of him being the finance minister’s son. Karti was the promoter of Chess Management Services.
CBI’s FIR described the quid pro quo shown by INX Media by making payment to Karti, “for the services rendered by Karti P Chidambaram to INX Group through Chess Management Services…considerations in the form of payment were received against an invoice raised on INX Media by one Advantage Strategic Consulting (P) Limited (ASCPL).”The investigative agency alleged that the invoice raised in the name of ASCPL for the services rendered by Chess Management Services was to conceal Karti’s identity.