INX Media case: Bid to legalise dubious FDI as finance minister to help son Karti puts P Chidambaram in dock

New Delhi: Former finance minister P Chidambaram is untraceable after Supreme Court turned down his plea for urgent hearing of his anticipatory bail application in INX media case.

The senior Congress leader suffered twin setback on Tuesday when Delhi High Court first rejected his plea and subsequently the apex court asked him to move the appeal on Wednesday. The legal tussle followed by the two central investigating agencies, Central Bureau of Investigation and Enforcement Directorate's swift search at his residence in posh Jor Bagh locality sent a clear message that the case hanging fire since May 2017 finally got a pair of new wheels.

File image of former Finance Minister P Chidambaram. AFP

Chidambaram, Delhi High Court said, was a key conspirator in the alleged INX Media scam and the FDI clearance to the company was given at a time when he was the finance minister. The CBI said that INX Media hired the services of his son Karti Chidambaram to influence the Foreign Investment Promotion Board (FIPB) approval. The entire conspiracy had many players including promoters Indrani and Peter Mukerjea as well as many bureaucrats. The Central Vigilance Commission (CVC) has already sought sanction to prosecute four bureaucrats who had served in the finance ministry — Sindhushree Khullar, Anup Pujari, Prabodh Saxena and Rabindra Prasad — and allegedly played a role in the entire conspiracy.

The FIPB approval was allegedly manipulated after the board's meeting on 18 May 2007 refused downstream investment by INX Media in INX News Private Limited. Nevertheless, INX Media went ahead and made a downstream investment of Rs 305 crore in INX News Private Limited without the FIPB approval. Months later the investigation wing of the Income Tax Department swung into action and sought clarifications from the FIPB unit which falls the finance ministry. The Income Tax Department sought clarification about the nature of investment as it was contrary to the policy and procedures of foreign direct investment.

Subsequently, FIPB sought clarification from INX Media and in order to wriggle out of the situation, the company allegedly entered into a criminal conspiracy with Karti Chidambaram. CBI alleged that Karti's services were hired to get the issue resolved by influencing the public servants of the FIPB unit of the Ministry of Finance by virtue of his relationship with then finance minister Chidambaram.

Based on the suggestions of Karti's company Chess Management Services Private Limited, INX Media on 26 June 2008 justified the foreign inflow arguing that it was premium received against the shares. After getting the reply from INX Media, concerned bureaucrats in FIPB unit, CBI claimed, under the influence of Karti Chidambaram not only ignored the serious illegality but also deliberately embarked on showing undue favours to the company by abusing their official position.

Manjul toon

The FIPB unit advised INX News Private Limited to apply afresh for approval in respect of the downstream investment, which has already been made by INX Media Private Limited. Shockingly, the officers under the scanner also ignored the request of the Department of Revenue to investigate the matter as to how downstream investment in INX News Private Limited was made without FIPB approval.

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Both FIPB unit and INX Media knew about the investment already made but they allegedly conspired in filing a fresh application as well as receiving the favourable decision. The CBI said such a fallacious proposal was allegedly favourably considered by the officials of Ministry of Finance and approved by the then finance minister P Chidambaram.