CBI raids P Chidambaram, son Karti: Frequently asked questions about the INX Media scam
In an early morning development on Tuesday, the CBI raided the residences of former Union minister P Chidambaram and his son Karti P Chidamabaram, simultaneously with 14 other locations across Delhi, Noida and Mumbai.
The Central Bureau of Investigations (CBI) raided the residences of former Union minister P Chidambaram and his son Karti P Chidamabaram on Tuesday morning, simultaneously with 14 other locations across Delhi, Noida and Mumbai.
According to CNN-News18, the raid took place after an FIR was registered against Karti Chidambaram over Foreign Investment Promotion Board's (FIPB) approvals for INX media — then owned by Peter Mukerjea and his wife Indrani — in 2007-2008. The agency has registered the case against INX Media through its director Indrani and Peter Mukerjea, Karti Chidambaram, Chess Management Services (a company owned by Karti), and Advantage Strategic Consulting Limited through its director Padma Vishwanathan.
Reports also suggested that Karti took bribes from the Mukherjeas by promising to get them clearances from his father, who was then Union finance minister in the Manmohan Singh government.
Here is all you need to know about the INX Media scam:
Indrani and Peter Mukherjea founded INX Media in 2007. They sought clearances from the Foreign Investment Promotion Board (FIPB), which is the authority to vet foreign investment requests in India, on investments made by Non Resident Indians (NRIs) and on downstream investment. While the FIPB approved the former request in 2007, the latter took a while, since the board urged the company to seek separate approvals.
Downstream investment is a type of financial investment wherein an Indian company with foreign investors later invests in an Indian company.
What is the irregularity in the deal?
According to a report in Business Standard, INX Media was allowed to seek FDI worth Rs 4.62 crores only. However, in contravention of FIPB rules, it created FDI worth Rs 300 crores through the process of "downstream investment", by issuing shares at premium of Rs 800.
When did this irregularity come to light?
In early 2008, when the matter came under the scanner of the FIPB, which then sent notices to the media firm, the issue was highlighted in the media, as reported in the Business Standard article.
Karti Chidambaram's entry into the case
According to the FIR, that was filed on Tuesday, Karti was brought into the picture by the Mukherjeas "to wriggle out of the situation without any punitive action".
Karti, using his influence in the Finance Ministry on account of his father's position, tried to clear the approval for the media firm.
Through his company Chess Management Services, in which he was also a director, Karti allegedly directed the entire scam. Being a management firm, it gave a number of suggestions for clearing the approval to INX Media, which incorporated them in its reply to the FIPB.
On account of his influence, even officers in the department overlooked the previous illegality and gave "undue favour to the INX Group".
What about the bribe paid to Karti?
Karti's other company, Advantage Strategic Consulting, also facilitated clearances to INX Media in 2008. In its detailed report, India Today explains how investigations revealed Karti receiving kickbacks from INX Media at a time when FIPB approval papers for the company were pending with his father, the then Union finance minister. The report said that on 22 September, 2008, Advantage Strategic Consulting got Rs 35 lakh from INX Media.
The report also noted that Karti's companies had a quid-pro-quo relationship with INX Media, receiving lakhs of shares from the Mumbai-based company in return for favours done to them.
What is the ED angle to the case?
According to media reports, it was an earlier raid by the Enforcement Directorate during the investigation against Karti Chidambaram in the Aircel-Maxis deal that gave clues about possible irregularities in clearing the approval in 2008. The ED then tipped off the CBI to take action on the case.
What has P Chidambaram said about the issue?
The former finance minister issued a statement after the raids began. "The government, using CBI and other agencies, is targeting my son and his friends. The government's aim is to silence my voice and stop me from writing, as it has tried to do in the cases of leaders from opposition parties, journalists, columnists, NGOs and civil society organizations. All I will say is, I shall continue to speak and write," he said.
"FIPB approval is granted in hundreds of cases. The five secretaries who constitute FIPB, officials of the FIPB secretariat, and the competent authorities in each case are all public officials. There is no allegation against any of them. There is no allegation against me," his statement continued.
Terming it vendetta politics, Chidambaram said, "Every case was processed according to law and approval was granted or refused in accordance with the recommendations of the FIBP, consisting of five secretaries to the Government of India."
Have the Mukherjeas been raided too?
Yes. The CBI on Tuesday raided the residences of the couple immediately after the raids were conducted in Mumbai.
What is Karti's defence?
Karti told reporters on Tuesday that the raids were part of political witch hunt spearheaded by the BJP-led NDA government at the Centre against leaders of the Opposition. He also added that the CBI had no evidence against him and that the latest development is a ploy by the BJP to stop his father Chidambaram from speaking against the government.
"The case against me has been foisted purely out of political reasons and vendetta. Nothing can be proven against me and I have not done any crime. It has been done mainly to muzzle my father's voice against the government," he said.
With inputs from agencies
Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.
Hafiz Saeed's 'ten-year jail sentence' is an eyewash; LeT chief remains emblem of Pakistani duplicity
Saeed has been in and out of house arrest since 2008, with the courts setting him free after the State seemed unable to frame charges
The judge, who will demit the office on 30 Nov, added that subject to the orders of the CJI, the pleas will be listed before another bench on 1 Dec
This pandemic sounds an alarm about the consequences of inefficient planning and management of cities and poses an opportunity to rethink and rebuild the areas that are most important to the country’s growth