Karti Chidambaram Case: Political Vendetta or Scam

On 6 March, a Delhi Court granted the further custody of Karti Chidambaram until March 9 to Central Bureau of Investigation (CBI) which claimed to have found “concrete evidence” against Karti in the INX Media investment case. Karti, son of former Union Minister P Chidambaram, was arrested by the CBI on February 28 for allegedly influencing the Foreign Investment Promotion Board (FIPB) back in 2008 which granted “undue favours” to the INX Media company. Last year, Enforcement Directorate (ED) had also lodged a money laundering case against Karti for his alleged “deal” with INX Media. Supreme Court has scheduled to hear Karti’s plea seeking interim protection from arrest by the ED on 8 March.

Advantage Strategic Consulting Pvt Ltd (ASCPL), a company that CBI has claimed is “indirectly controlled” by Karti, is also being investigated by the CBI. It had earlier emerged from the ED’s probe that the ASCPL had received payments worth Rs 10 lakh from INX Media on July 15, 2008. Subsequently, INX Media was granted FIPB permission despite its alleged violation of norms.

Quoting sources, Economic Times reported that the companies – Chennai-based Rochester Technology, which is a subsidiary of ASCPL, Mumbai-based North Star Solutions, are under the scanner of the CBI. The investigative officers are suspecting the involvement of these companies allegedly used by Karti as “fronts” to receive "kickbacks" for ensuring official permissions from the finance ministry. Also, it has been reported that certain FIPB officials have been sent notices by the CBI in this regard.

INX Media

INX Media Pvt Ltd was founded by Peter and Indrani Mukerjea in 2007. Both of them are accused in the Sheena Bora murder case and are lodged in jail in Mumbai since 2015. Basing on Indrani Mukerjea’s statement to CBI that Karti asked for $1 million dollars for FIPB clearance, the CBI took Karti into its custody on 28 February.

Peter and Indrani Mukerjea exited INX Media by selling all their shares in March 2009.

How did it all start?

Based on an alert by the Financial Intelligence Unit (FIU-IND) concerning foreign direct investment in INX Media of over Rs 305 crore by Mauritius-based companies – Dunearn Investment (Mauritius) Pte Ltd, New Silk Route PE Mauritius LLC, and New Vernon Pvt Equity Ltd, the Income-Tax Department in Mumbai initiated an investigation and it subsequently forwarded the case to the ED.

After a preliminary investigation, In 2010, ED registered a case against INX Media for alleged violations of the Foreign Exchange Management Act. After a dragged investigation for seven years, in 2017, ED found some documents from Karti’s Charted Accountant Bhaskarraman’s computer. The documents allegedly indicated payments made to ASCPL company by INX Media at the time it was granted FIPB approval in 2008. Following this, ED lodged a money laundering case against Karti and CBI registered a case of corruption in May 2017. Interestingly, on May 24, 2017, the central government issued a circular abolishing FIPB.

Political Vendetta or Scam

Karti Chidambaram, during the court hearings in Delhi Court, has reportedly kept on saying “I am a victim of political vendetta”. On one hand, Congress leaders are blaming the ruling BJP government for influencing investigative agencies – ED and CBI for initiating baseless probes by specifically targeting individuals. On the other, BJP leaders are claiming the case to be a scam under previous UPA government.

The investigative agencies have so far proceeded with their investigation based on the claim that the timing of the payment received by ASCPL from INX Media and the subsequent favours it was granted.