CVC seeks sanction to prosecute ex-NITI Aayog CEO, former MSME secretary, serving IAS officer in INX Media case

New Delhi: The Central Vigilance Commission (CVC) has advised the Department of Economic Affairs under the Ministry of Finance to issue a sanction to prosecute former NITI Aayog CEO Sindhushree Khullar, former secretary of the Ministry of Micro, Small & Medium Enterprises Anup K Pujari and current principal secretary in the Himachal Pradesh government, Prabodh Saxena, in the alleged case of corruption involving INX Media.

The CVC sent its request on 13 May. Khullar, Pujari — both retired IAS officers — and Saxena served in the Department of Economic Affairs, which is the competent authority to grant or refuse a sanction after examining whether the material placed before it by the investigative agency prima facie indicates that an offence has been committed.

File images of Prabodh Saxena, Sindhushree Khullar and Anup Pujari. Image Courtesy: Govt of Himachal Pradesh, PIB, Twitter

According to their executive record sheets, Khullar served as additional secretary in the Department of Economic Affairs between 11 April, 2004, and 11 September 2008; Pujari was the joint secretary from 29 September, 2006, to 30 September, 2010; and Saxena served as the director of the department between 2 April, 2008, and 13 July, 2010.

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The CVC has also sought sanction to prosecute Rabindra Prasad, the under secretary in the Department of Economic Affairs during the period in question.

Sources said the Central Bureau of Investigation (CBI) is looking into the role of officials of the finance ministry — including the four mentioned above — in the approval of the ConnectTheDots (FIPB) granted to INX Media. The FIPB, which functions under the Department of Economic Affairs, at its board meeting on 18 May, 2007, had recommended the proposal of INX Media Pvt Ltd for the inflow of foreign direct investment up to Rs.4.6 crore while clearly stating that downstream investment in INX News will require a separate FIPB approval. However, violating the approval, INX Media had made a downstream investment of 26 percent in the capital of INX News Pvt Ltd without this fresh FIPB approval.

The Income Tax Department sought a clarification from the FIPB in February 2008, and subsequently, a notice was served to INX Media. The CBI has alleged that to wriggle out of the situation without any punitive action, INX Media took the help of Karti Chidambaram, son of the then finance minister P Chidambaram.

On 26 June, 2008, INX Media had sent a reply to FIPB justifying the investment in INX News. In its FIR, the CBI said: "The concerned officers of the FIPB unit of the Ministry of Finance, by virtue of the influence exercised over them by Karti Chidambaram, not only ignored the serious illegality on the part of INX Media on both counts but also deliberately embarked on showing undue favour to the INX Group by abusing their official position and advised INX News to apply afresh for FIPB approval in respect of the downstream investment that INX Media had already made."

"In their endeavor to show undue favour to the INX Group, the officers of the FIPB unit also ignored the request of the Department of Revenue to investigate the matter as to how the company made a downstream investment in INX News without an FIPB approval. INX News, by deliberately concealing the fact that they had already received an investment from INX Media to the extent of 26 percent, including indirect foreign investment in pursuance to a criminal conspiracy, again approached the FIPB unit of the Ministry of Finance on their suggestion and sought permission for the downstream investment. The officials of the Ministry of Finance had favorably considered this deceitful and fallacious proposal, and it was approved by the then finance minister."

Moreover, the CBI had also alleged that by such partisan and malafide acts, carried out as part of the criminal conspiracy with the beneficiary company and the intermediaries, the senior officials of the Ministry of Finance not only granted illegal approval but also misinformed the sleuths of the I-T department's investigation wing.

The agency had further alleged that a firm with links to Karti Chidambaram had subsequently received kickbacks for influencing the public servants of the FIPB.

In its FIR dated 15 May, 2017, the CBI had named Peter Mukerjea, Indrani Mukerjea, INX Media, INX News, Karti Chidambaram, Chess Management Services Pvt Ltd and unnamed and unknown officials of the Ministry of Finance as accused in the case. Although P Chidambaram was not named in the FIR, the government, earlier in February, had allowed the CBI to prosecute him in the INX Media-FIPB approval case. Saxena, Pujari, Khullar and Prasad, who served in the Department of Economic Affairs during P Chidambaram's tenure as finance minister, are now under the CVC radar.

According to the provisions of the Prevention of Corruption Act, the Department of Economic Affairs needs to decide within three months on whether to grant a prosecution sanction. It is mandatory for an investigative agency to get this sanction to prosecute an accused officer. In case of differences between the department concerned and the CVC over the prosecution sanction, the matter should be referred to the Department of Personnel and Training (DoPT) for final advice.

Despite repeated attempts Saxena and Pujari were not reachable for comment. Nor were interim CVC Sharad Kumar and CVC secretary Anindo Majumdar.

Furthermore, the CVC has also advised the government to grant of sanction for prosecution against A Subbiah, a 1992 batch IAS officer of the West Bengal cadre who currently serves as additional secretary (general administration) in the state. Subbiah was named in an alleged corruption case linked to the VO Chidambaram Port Trust in Tuticorin, where he served between 30 April, 2007, and 30 April, 2012.

The CBI claimed that Subbiah received kickbacks from a mineral company and the alleged graft was camouflaged as legitimate property sales. According to sources, the CVC advice to issue a prosecution sanction has been pending since 3 May, 2017, and a new communique was to the DoPT on 14 May.

On 10 May, the the vigilance watchdog also asked for sanction to prosecute former Tamil Nadu cadre IAS officer Gurnihal Singh Pirzada, who the agency claimed had floated shell companies to siphon funds while serving in the Punjab government from 1999 to 2001. The Enforcement Directorate had launched investigation into the case under the Prevention of Money Laundering Act in 2018.