Is Karti's defense sound enough?

Vasan Healthcare allegations Reports of ED stepping in Chidambaram calls TNIE story ridiculous Image: Karti Chidambaram FB page and Rameshng via Wikimedia Commons
news Sunday, September 20, 2015 - 14:52

Since RSS ideologue and chartered accountant wrote about the allegations of money laundering and holding benami companies as front for funnelling money through Vasan Healthcare in The New Indian Express, there has been consistent front-page reportage on the story in the newspaper.

Ever since the allegations surfaced it has been reported that the Directorate of Enforcement has summoned the chairman of Vasan Healthcare regarding these allegations. A stakeholder in the company, V Dwarakanathan, has also been reportedly summoned by the ED, according to a report in Times of India. 

Reacting to the first time on the issue, former Finance Minister P Chidambaram said:

"The allegations were so ridiculous and laughable that I thought it was not necessary for me to issue a rebuttal. However, I find that some other sections of the media have carried the same report recklessly. Obviously, I cannot remain silent. The entire report is false, malicious and part of a political campaign against members of the UPA government or individuals belonging to the Congress party.

Neither I nor my son nor any member of my family have any equity of investment or economic interest in the company concerned. I have no knowledge of events conceding the Income Tax department or its officers said to have taken place in June 2016 and subsequently."

Further, it has come to light that a respected member of the Vasan board, MA Alagappan of the Murugappa Group, has since resigned from his directorship.

In a cryptic tweet, seemingly a response to the allegations, Karti Chidambaram said that the affairs of a private company are theirs to handle.

 

Beyond this, Karti Chidambaram has refused to respond to the allegations made by S Gurumurthy.

The News Minute has however spoken to some sources who presented a defense to the allegations.

One, as Karti himself says, that these are affairs of a private company and since there is no public money involved in the transactions, there is no ‘scam’ here.

Second, Karti camp is outright dismissive of these allegations stating they come from politically motivated individuals.

Third, Karti camp says that members of the Vasan board are credible organizations and business tycoons like Government of Singapore and Sequoia Capital.

But are these arguments sound enough?

The allegations are about money laundering, not abuse of power. Private companies are answerable to government over that. If the ED has indeed stepping in, questions will be raised on where the money for the initial investments came in. If the money is linked to Karti, then he might have to explain its source.

The resignation of MA Alagappan hints that there seems to be internal dissent on how the company was managed. Even so, the allegations of money laundering are possibly pertaining to a period before the heavy-duty investors stepped in.

There are stark similarities between how the BSNL-scam allegations on Dayanidhi Maran played out and this case. Then too, the lid was first blown off by Gurumurthy on the pages of TNIE. After that, government investigating agencies stepped in and Maran is now fighting the battle in court. The case cost Maran significant political capital and led to legal woes. Whether the allegations are true or not, the road ahead for Chidambarams does not seem to be an easy one.

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