The noose around Mr. P. Chidambaram is tightening as CBI today has issued notice in relation to INX Media scam case. As the Supreme Court has also denied any interim relief to him, Mr. P. Chidambaram, once the most powerful minister in the Manmohan Singh’s cabinet is trying to escape arrest and he is nowhere to be seen.
Delhi High Court on Tuesday said that the INX media case was a “classic case of money laundering“.
What is meant Money Laundering? How it is done, let’s understand.
Money laundering is the process of making large amounts of money generated by a illegal activity, appear to have come from a legitimate source. The money from the criminal activity is dirty, and the process “launders” it to make it look clean. Money laundering is itself a crime.
The process of laundering money typically involves three steps: placement, layering, and integration.
- Placement puts the “dirty money” into the legitimate financial system.
- Layering conceals the source of the money through a series of transactions and bookkeeping tricks.
- In the final step, integration, the now-laundered money is withdrawn from the legitimate account to be used for whatever purposes the criminals have in mind for it.
The INX Media case
The ED in May 2017, lodged an Enforcement Case Information Report (ECIR) – a police FIR equivalent – against Chidambaram’s son Karti Chidambaram, INX Media and its directors, Peter and Indrani Mukerjea, along with a couple of others under the provisions of the Prevention of Money Laundering Act (PMLA).
Based on the information provided by the ED, the CBI filed an FIR against the accused mentioned above.
- In March 2007, INX Media had approached Chairman of FIPB, seeking permission for issuing equity shares to three non-resident investors based in Mauritius through the foreign direct investment (FDI) route. This money was for creating and operating a number of television channels.
- The application to the FIPB also mentioned its intention to make a downstream financial investment.
- A few months later, the FIPB board approved INX’s proposal, of FDI/NRI inflow but did not approve the proposed downstream investment.
So the FIR primarily alleged that “INX Media deliberately, violating the conditions went ahead with the downstream investment and generated FDI exceeding Rs 305 crore in the company between August 2007 and May 2008.
When Income Tax Department sought clarification in February 2008, INX Media allegedly offered kickbacks to Karthi Chidambaram to come out of this mess.
The CBI said that Karti had received funds of Rs 10 lakh in the case. During a raid CBI recovered vouchers for this amount issued in favour of Advantage Strategic Consulting (P) Limited, a firm “indirectly” owned by him.
Indrani Mukerjea and her husband Peter Mukerjea, who co-founded INX Media in 2007, had been charged with entering into a criminal conspiracy with Chidambaram and son Karti to get foreign investments and evade necessary approvals from the FIPB.
- In March 2018, Indrani Mukerjea told the CBI, that a deal of 1 million dollars was struck between Karti Chidambaram and the Mukerjeas to secure approval from the FIPB in favour of INX Media. Last month, a Delhi court had allowed Indrani Mukerjea, to turn approver in the INX case.
The ED has attached properties worth Rs 54 crore belonging to Karti Chidambaram in connection with the case.
The tightening noose around P Chidambaram and son Karti
INX Media scam is not the first time when Mr. P. Chidambaram used his power in office to get clearances for the financial deals which involves FDI
- In 2017 CBI had issued notice to Karthi in Aircel-Maxis kickbacks case.
- The case is related to a FIPB approval cleared by Chidambaram as finance minister in 2006. The approval was given for investment by a Mauritius-based firm, Global Communication Holding Services Ltd in Aircel, the telecom service provider.
Global Communication Holding Services Ltd is a subsidiary of Maxis Communications, the Malaysia-based firm.
- Under the existing FDI policy and rules in 2006, P Chidambaram was empowered to give approval of the foreign investment to the proposals not exceeding Rs 600 crore.
- The Aircel-Maxis deal was about investment of 800 million dollars. This was about Rs 3,500 crore at the time.
- The policy required Chidambaram to place the proposal to the Cabinet Committee on Economic Affairs (CCEA).
- But, the matter was not referred to the CCEA. Chidambaram, approved the proposal at his level. Now, the ED says that it was done as part of a conspiracy.
CBI alleges that Chidambaram cleared the deal because his son Karti Chidambaram was given kickbacks.
The CBI has alleged that following the approval by Chidambaram,
- Aircel Televentures Limited paid Rs 26 lakh to a company linked to Karti Chidambaram.
- Another sum of around Rs 90 lakh was received by Chess Management Services. This company was promoted by Karti Chidambaram and A Palaniappan, the nephew of P Chidambaram.
The payment of 2 lakh dollars came from the Maxis group in the name of buying a legal compliance software. The agencies say that these payments were not genuine and of kickback nature.
After getting the bail for a record number of time, the father-son duo are in deep trouble this time.
Dr Sindhu Prashanth