Karti Chidambaram has been arrested by the CBI for not cooperating in the investigation of the INX media Money Laundering Case
Karti, son of senior Congress leader P Chidambaram, was at the Chennai airport just after he arrived in a flight from London
The CBI has alleged that firms with links to Karti had influenced FIPB approval for Rs 305 crore irregular investment in INX media. This took place in 2007 when his father was the Finance Minister. The FIR has been registered against Karti, INX Media along with eight others and unknown officials of the finance ministry.
The Finance Ministry received an application from INX media for FIPB approval on March 15, 2007. The FIPB, in a meeting on May 18, 2017, recommended the proposal of INX media. However, the board did not approve downstream investment by INX media in INX news. And even for INX media, FIPB allowed fdi inflow of only Rs 4.62 crore.
As per the CBI FIR, contrary to approval of FIPB, INX media deliberately violated conditions and made downstream investment up to 26% in the capital or INX news.
They allegedly generated over Rs 305 crore of FDI in INX media against the allowed foreign inflow of Rs 4.62 crore by issuing shares to foreign investors at a premium of over Rs 800 per share
The CBI has alleged that officers concerned of the FIPB unit by virtue of influence of Karti Chidambaram, not only ignored serious illegalities on part of INX media, on both accounts, but also deliberately showered undue favours. The officers also ignored the request of Revenue Department seeking an investigation into the matter.
As per the CBI, INX Media tried to wriggle out of the situation by entering into a criminal conspiracy with Karti Chidambaram, promoter of Chess Management Services, “to get the issue resolved amicably by influencing public servants of FIPB unit of the Finance Ministry by virtue of his relationship with the then Finance Minister (P Chidambaram).”
The FIR goes on to describe the quid pro quo by showing how INX media made the 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 FIR further states that the “very reason for getting the invoice raised in the name of M/s/ ASCPL for the services rendered by Chess Management Services was with a view to conceal the identity of Karti.”
The CBI in its FIR has also claimed that “such deceitful and fallacious deal was favourably considered by Ministry of Finance and Approved by the then Finance Minister.” And thus in a way has also brought the role of his father P Chidambaram under scanner.
INX Media Case - All You Need To Know
In 2008, as much as Rs 305 crore of Foreign Direct Investment (FDI) was made in INX Media Pvt Ltd (now called 9X Media Pvt Ltd) by three Mauritius-based companies.
The amount of FDI was a red flag to the Enforcement Directorate (ED), which registered a case against INX Media for alleged irregularities in the transaction and violation of the Foreign Exchange Management Act(FEMA)
The ED alleged that approval for the FDI was granted in 2007, when P Chidambaram was finance minister in the UPA 1 regime. INX allegedly violated the conditions of approval and to avoid legal action, entered into a criminal conspiracy with minister Chidambaram’s son Karti, the ED said. Based on information provided by the ED, the CBI filed an FIR against Karti in May 2017.
The FIR registered by the CBI suggests that the now disbanded Foreign Investment Promotion Board (FIPB) granted permission to INX Media on May 30, 2007, to bring in FDI of Rs 4.62 crore. However, INX Media flouted the conditional approval of the board and brought in over Rs 305 crore. CBI further alleged that Karti exercised influence over certain FIPB officials – owing to proximity to his father’s high office - and the department, and they extended undue favours to the media firm
Since filing the FIR, as many as 14 locations across the country were raided by the CBI. On February 16, Karti's chartered accountant S Bhaskararaman was arrested from a five-star hotel in Delhi by the ED which is also investigating a money laundering case against Karti. Last week, Karti moved the Supreme Court, seeking a stay on summons issued by the ED. The apex court denied the stay order. The ED had earlier summoned Karti on February 2, after which he informed them he would be unable to depose as he had an interlocutory application pending in the Supreme Court in this case.
Karti, son of senior Congress leader P Chidambaram, was at the Chennai airport just after he arrived in a flight from London
The CBI has alleged that firms with links to Karti had influenced FIPB approval for Rs 305 crore irregular investment in INX media. This took place in 2007 when his father was the Finance Minister. The FIR has been registered against Karti, INX Media along with eight others and unknown officials of the finance ministry.
The Finance Ministry received an application from INX media for FIPB approval on March 15, 2007. The FIPB, in a meeting on May 18, 2017, recommended the proposal of INX media. However, the board did not approve downstream investment by INX media in INX news. And even for INX media, FIPB allowed fdi inflow of only Rs 4.62 crore.
As per the CBI FIR, contrary to approval of FIPB, INX media deliberately violated conditions and made downstream investment up to 26% in the capital or INX news.
They allegedly generated over Rs 305 crore of FDI in INX media against the allowed foreign inflow of Rs 4.62 crore by issuing shares to foreign investors at a premium of over Rs 800 per share
The CBI has alleged that officers concerned of the FIPB unit by virtue of influence of Karti Chidambaram, not only ignored serious illegalities on part of INX media, on both accounts, but also deliberately showered undue favours. The officers also ignored the request of Revenue Department seeking an investigation into the matter.
As per the CBI, INX Media tried to wriggle out of the situation by entering into a criminal conspiracy with Karti Chidambaram, promoter of Chess Management Services, “to get the issue resolved amicably by influencing public servants of FIPB unit of the Finance Ministry by virtue of his relationship with the then Finance Minister (P Chidambaram).”
The FIR goes on to describe the quid pro quo by showing how INX media made the 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 FIR further states that the “very reason for getting the invoice raised in the name of M/s/ ASCPL for the services rendered by Chess Management Services was with a view to conceal the identity of Karti.”
The CBI in its FIR has also claimed that “such deceitful and fallacious deal was favourably considered by Ministry of Finance and Approved by the then Finance Minister.” And thus in a way has also brought the role of his father P Chidambaram under scanner.
INX Media Case - All You Need To Know
In 2008, as much as Rs 305 crore of Foreign Direct Investment (FDI) was made in INX Media Pvt Ltd (now called 9X Media Pvt Ltd) by three Mauritius-based companies.
The amount of FDI was a red flag to the Enforcement Directorate (ED), which registered a case against INX Media for alleged irregularities in the transaction and violation of the Foreign Exchange Management Act(FEMA)
The ED alleged that approval for the FDI was granted in 2007, when P Chidambaram was finance minister in the UPA 1 regime. INX allegedly violated the conditions of approval and to avoid legal action, entered into a criminal conspiracy with minister Chidambaram’s son Karti, the ED said. Based on information provided by the ED, the CBI filed an FIR against Karti in May 2017.
The FIR registered by the CBI suggests that the now disbanded Foreign Investment Promotion Board (FIPB) granted permission to INX Media on May 30, 2007, to bring in FDI of Rs 4.62 crore. However, INX Media flouted the conditional approval of the board and brought in over Rs 305 crore. CBI further alleged that Karti exercised influence over certain FIPB officials – owing to proximity to his father’s high office - and the department, and they extended undue favours to the media firm
Since filing the FIR, as many as 14 locations across the country were raided by the CBI. On February 16, Karti's chartered accountant S Bhaskararaman was arrested from a five-star hotel in Delhi by the ED which is also investigating a money laundering case against Karti. Last week, Karti moved the Supreme Court, seeking a stay on summons issued by the ED. The apex court denied the stay order. The ED had earlier summoned Karti on February 2, after which he informed them he would be unable to depose as he had an interlocutory application pending in the Supreme Court in this case.
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