Minutes after landing at the Chennai airport, Karti Chidambaram, the son of former Union Finance Minister P Chidambaram was arrested by the CBI on Wednesday for alleged money laundering. The arrest comes nine months after the CBI registered an FIR against him, and others including then INX Media Director Indrani Mukerjea and then INX News Director Peter Mukerjea.
What is the INX Media case?
The case dates back to 2007 when INX Media applied for clearance with the Foreign Investment Promotion Board (FIPB) on March 15 that year. INX Media had sought this approval in order to operate and broadcast a bouquet of channels including Hindi entertainment channel, and multiple vernacular entertainment channels. According to the CBI, the Board in its meeting on 18 March, 2007 approved an FDI inflow of Rs 4.62 crore against INX Media. It did not, however, approve the downstream investment by INX Media in INX News.
As per the CBI’s FIR, “INX Media (P) Limited 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 (P) Limited without the specific approval of FIPB which included indirect foreign investment by the same foreign investors and (ii) generated more than Rs 305 crores Foreign Direct Investment in INX Media (P) Limited against the approved foreign inflow of Rs 4.62 crores…”
Months later, in May 2008, FIPB issued a letter to INX Media seeking clarification on both issues.
This is when Karti Chidambaram comes into the picture, alleges the CBI.
Karti’s role in the case
The CBI alleges that in order to wiggle out of the situation without any punitive action, INX Media entered into a criminal conspiracy with Karti Chidambaram, whose father P Chidambaram was then the Finance Minister.
Based on clarifications suggested by Chess Management Services, whose promoter is Karti, INX Media replied to FIPB’s letter “justifying their actions”. Furthermore, CBI alleges that owing to Karti’s influence, the concerned officers and officials of the Board not only ignored the violations on the part of INX Media but also advised the group to apply for fresh FIPB approvals. This “deceitful and fallacious” proposal was later approved by the then Finance Minister P Chidambaram.
The CBI alleges that for getting the FIPB issue scuttled, Karti was paid for his “services” by INX Media, with invoices raised in the name of Advantage Strategic Consulting Pvt Limited (ASCPL) to the tune of Rs 10 lakh. ASCPL is indirectly controlled by Karti, claims the agency, and the reason to raise the invoice against its name was to conceal his identity. The CBI also alleges that invoices for Rs 3.5 crore were also raised by INX Media in the name of other companies, where Karti had sustainable interests.
Karti has, however, called the charges baseless and claimed that he was being politically and personally targeted.