Following CBI raids at the residences, offices and several properties belonging to Karti Chidambaram and his father former Union Minister P Chidambaram, an FIR was registered by the CBI in New Delhi on Tuesday.
The FIR is against INX Media through its then Director Indrani Mukherjea, INX News through its then Director Pratim Mukherjea, Peter Mukherjea and others, Karti Chidambaram, Chess Management Services Private Ltd through its Director Karti Chidambaram , Advantage Strategic Consulting Private Ltd through its Director Padma Vishwanathan, Padma Bhaskararaman, and others. The FIR has also been filed against unknown officials of the Finance Ministry. All accused have been booked for criminal conspiracy, cheating, taking gratification, in order by corrupt or illegal means to influence public servant and criminal misconduct.
What the case is all about
As per the FIR, an application for FIPB (Foreign Investment Promotion Board) clearance was received from INX Media on March 15, 2007. FIPB Unit had in its report clearly mentioned that there was an inflow of Foreign Direct Investment to the tune of Rs 4.62 crore. The FIPB Board had recommended INX Media's proposal for consideration and approval of the Finance Minister. However, according to the FIR, in the same meeting, the FIPB Board did not approve the downstream investment by INX Media in INX News. The recommendations then were approved by the Finance Minister.
However, the FIR states that contrary to the approval of the FIPB, INX Media "deliberately and in violation of the conditions of the approval (i) made a downstream investment to the extent of 26% in the capital of INX News without the specific approval of the FIPB which included indirect foreign investment by the same foreign investors and (ii) generated more than Rs 305 crore Foreign Direct Investment in INX Media against the approved inflow of Rs 4.62 crore".
The FIPB unit had on May 26, 2008 sought clarifications from INX Media with regard to the two issues and it was on receipt of this letter that the company "in order to wriggle out of the situation without any punitive action entered into a criminal conspiracy with Karti Chidambaram, the son of P Chidambaram, the then Finance Minister" to get the matter resolved by influencing officials of the FIPB Unit, notes the FIR.
On the advice of Chess Management Services, INX Media justified its actions to the FIPB in a letter dated June 26, 2008. The FIR goes on to state that concerned officers of the FIPB Unit by virtue of the influence exercised over them by Karti Chidambaram, not only ignored the serious illegality on the part of INX Media but also deliberately showed undue favours. It also notes that the officers ignored requests of the Department of Revenue to investigate the matter.
The FIR goes on to note that for the services rendered by Karti Chidambaram to INX Media through Chess Management Services, payments were received against an invoice raised by Advantage Strategic Consulting Private Ltd (APSCL). "The source informs that the very reason for getting the invoice raised in the name of of APSCL for the services rendered by Chess Management Services was with a view to conceal the identity of Karti Chidambaram," reads the FIR. It also alleges that while Karti is the promoter of Chess Management Services, he indirectly controls APSCL.
The FIR states that invoices were raised to the tune of Rs 3.5 crore in favour of INX group in the names of other companies in which Karti was having interests, either directly or indirectly. Meanwhile, INX group in its record had listed Rs 10 lakh as payment to APSCL towards "Management consultancy charges towards FIPB notification and clarification."
Reacting to the raids and the FIR against him, Karti Chidambaram told reporters outside his Chennai residence that the charges were baseless. “I am being targeted politically and personally,” he said.
Addressing a press conference in New Delhi, CBI Joint Director Vineet Vinayak said, "Some important seizures including hard disks and other documents have been made in the raids."