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ED summons in Aircel-Maxis case: Chidambarams may have lot to worry about

The deeds of the past, they say, will come back to haunt you without fail some day. True, in all sense for Karti Chidambaram and his father, former union finance minister P Chidambaram. For Karti, who allegedly made a killing in the notorious Aircel-Maxis deal through a company he owns - Advantage Strategic Consulting Private Limited.

Not just Karti. When the probe advances further, the Aircel-Maxis case could prove to be the biggest jolt also for P Chidambaram in his political career, considering its multiple dimensions. Chidambaram was finance minister when the foreign investment promotion board approved the Aircel-Maxis deal.

The Enforcement Directorate (ED) summoning Karti may be just the beginning of several sleepless nights for the father-son duo.

Karti Chidambaram. Firstpost

Karti Chidambaram. Firstpost

To put it in nutshell, the whole story pertains to the forced selling of Aircel in 2006 by its owner entrepreneur C Sivasankaran allegedly under pressure from former Union telecom minister Dayanidhi Maran. To return the favour, Maxis invested about Rs 47 crore in the Sun Group, owned by Dayanidhi Maran’s brother, Kalanidhi Maran.

Karti Chidambaram allegedly facilitated the whole transaction through his firm Advantage Consulting and passing the bribes.

Karti may not have a solid defence in the Maxis case. As a New Indian Express investigative series revealed, he will have a lot of explaining to do to prove the legitimacy of his assets worldwide through the firms allegedly owned by him and an army of benamis who have facilitated the transactions.

When the skeletons begin to tumble out of the closet, the case may not be limited to the Aircel-Maxis deal alone. The investigations are leading to complex web of benami transactions used by Chidambarams to hide their ill-gotten wealth. As the New Indian Express expose reveals, Karti owned majority stake in Advantage through a holding company Ausbridge. But, the ownership of the company — Advantage — was shown in the names of benamis, who in turn wrote wills later to transfer the ownership to Karti’s daughter. And who keeps these wills? Here again, Karti, as found in his vault by a joint team comprising Income Tax and Enforcement authorities.

Now, what is Advantage’s wealth? Advantage India holds 90,000 shares out of the 1.5 lakh equity shares of Vasan Eye Care. The firm procured the shares at a throwaway price of Rs 100 per share. However, the report states, that it actually paid only one-third, or Rs 33 per share. It sold 60,000 shares in two tranches of Rs 30,000 to Sequoia Capital Investments, a Mauritius-based investment fund.

In the first tranche, 30,000 shares were sold at Rs 7,500 per share or Rs 22.5 crore. Assuming that the second tranche was also sold at the same price and if the balance shares are valued at the same price, then Vasan Eye Care's share would amount to Rs 112.5 crores which Advantage acquired at a mere Rs 50 lakh, according to the report. Now, that’s quite a killing, isn’t it?

Karti’s empire is spread in several countries, which would also mean several jurisdictions. The Singapore subsidiary of Advantage, Advantage Singapore, has real estate investments in at least 15 countries. But, under the Prevention of Money Laundering Act (PMLA), ED can expand its probe to any geographies and seek help of international agencies if needed.

Chidambaram, Karti’s father, has always pointed guns at the ruling BJP-government citing political vendetta, whenever investigators targeted Karti or his ‘friends’.

“If the government wishes to target me, they should do so directly, not harass friends of my son who carry on their own businesses and have nothing to do with politics," P Chidambaram said.

But, Chidambaram’s seeming attempt to politicise the issue may not work since the Congress party itself wouldn’t want to get involved in the case given the seriousness of the case and its larger political implications ahead of UP elections next year and amid the struggle of the party itself to rebuild its image. Also, there’ll be immense pressure on the Narendra Modi government not to loosen its stance from regional parties such as AIADMK and BJD.

In its two-year rule, the Modi government has gained reputation for its way of dealing with cronies and crooks. The government wouldn’t want to lose that image in this case as well. It has already lent a freehand to various investigating agencies in the Aircel-Maxis case until the complex threads of the deal, counter-deals and kickbacks are separated beyond suspicion. Karti has once jokingly said that having an Aircel SIM card is his only involvement in the Aircel-Maxis deal. But, it is unlikely that there will be any takers for that joke.

Published Date: Jul 05, 2016 14:08 PM | Updated Date: Jul 05, 2016 15:06 PM

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