INX Media scandal a classic case of system manipulation; ED notice brings end to P Chidambram's methods of evading agencies
P Chidambaram gave evasive replies to the probe agencies while he was under protective cover extended to him by the court, but that cover is now gone with both the CBI and ED issuing lookout circulars against the former finance minister
The political hue and cry in INX Media case ignores the facts that money was paid to subvert govt policies and a web of deception was created to gain illegal benefits
As pointed by the Delhi High Court, the proof gathered by agencies reveal that what P Chidambaram and his son Karti did was not a virtuous or moral act, but a classic case of money laundering
Karti created a web of firms that supposedly helped companies which needed to push a file in the North Block where the former finance minister was the decision-maker
Chidambaram gave evasive replies to the probe agencies while he was under protective cover in the form of anticipatory bails
With the ED and CBI lookout orders, that cover is gone and the Former finance minister is running out of tools to manipulate the situation in his favour
New Delhi: Truth always triggers a process and in former finance minister P Chidambaram's case, the cause and effect, which provided him with a long rope in the form of an end number of anticipatory bails and evasive responses to central probe agencies, was finally overpowered by the synchronicity of facts.
Despite overwhelming evidence, which raises doubts over all the decisions taken by Chidambaram as the Union finance minister, a malevolent influence was exercised to cover-up the misdeeds. It is ironic that the political hue and cry, in this case, has conveniently ignored the facts that money was paid to subvert government policies and a web of deception was created in conspiracy with key players to gain illegal benefits. The proof gathered by the agencies reveal that what Chidambaram and his son Karti did was not a virtuous or moral act, but a classic case of money laundering, as pointed by the Delhi High Court.
Karti created a web of firms that supposedly helped companies which needed to push a file in the North Block where Chidambaram, by virtue of being the finance minister, was the decision-maker. In the INX Media case, the evidence reviewed by Firstpost shows that Rs 3 crore was received by Advantage Strategic Consulting Private Limited (ASCPL) and other related concerns from suspicious companies including Span Fibre and Satyam Fibres. The ASCPL figures in at least two FIPB approval cases — INX News Private Limited case and Aircel-Maxis deal. And, there is another common thread — Vasan Healthcare Pvt Ltd.
After successfully manipulating INX News FIPB case, a leading global investment firm based in Singapore wanted to invest in Vasan Healthcare Pvt Ltd and the CBI alleges that Karti asked for Rs 20 crore in lieu of shares of ASCPL in Vasan Healthcare for smooth closure of the transaction.
Karti had denied the links with ASCPL but CBI claims that all the official and even personal expenses incurred by Karti and associates were borne by ASCPL which makes the issue of indirect holding amply clear.
Karti and his friend Mohanan Rajesh had floated a company named Ausbridge Holdings and Investments Private Limited (AHIPL) and the expenses for its incorporation were paid through an account of ASCPL. Rajesh, who is also a schoolmate of Karti and director of ASCPL, in his statement to the probe agencies, said that ASCPL allotted 66.77 percent of its total shares to AHIPL on Karti's instructions.
The cost for this layered transaction was borne by Rajesh, however, he was later compensated through companies owned by Karti's associates. CBI claims that the evidence collected during searches on Karti's associates, bank statements of ASCPL, email trails and other digital material shows that every aspect of the business affairs of ASCPL was controlled by Karti, every expense incurred by ASCPL was approved by him and the people making payments to ASCPL stated on record that payments were made to Karti.
As per an Enforcement Directorate (ED) note in the investigation into the Aircel-Maxis case, a company Sequoia Capital India Investments Holdings of Mauritius purchased 30,000 shares of Vasan Healthcare Pvt Ltd from ASCPL in the year 2009 for Rs 22.50 crore at a premium of Rs 7,500 per share. Interestingly, Vasan Healthcare Pvt Ltd incorporated on 22 June, 2007, transferred 1.5 lakh shares to ASCPL in the year 2008 at a price which does not prima-facie appear to be in conformity with the rate at which the shares were issued to the promoters. The ED observed that the net worth of the 5 percent equity shares of Vasan Healthcare Pvt Ltd held by ASCPL was Rs 102.65 crore in 2009, Rs 177.22 crore in 2010 and Rs 206.58 crore in 2011. The share price of Vasan Healthcare Pvt Ltd reached up to Rs 2,358 including premium in 2010-12.
The CBI claims Karti used his tennis partner CBN Reddy and his company Northstar Software Solutions Private Limited to receive kickbacks from INX Media after the FIPB approval, violating the rules, was finally cleared by the Ministry of Finance. Reddy, in his statement, admitted that money transferred into three entities — CBN Placement, Kriya FMCG and ASCPL belonged to Karti and he had no knowledge of the work done.
Fake invoices were raised to the companies by ASCPL and other concerns in order to show and legitimise the payments which were, in fact, bribe money for the favours shown by the then finance minister. Karti also received shares worth Rs 60 Lakh from Artevea Digital Limited, UK, on the promise of arranging funds. Karti did raise capital for the company owned by his college mate's husband but did not return the money.
It is not surprising to investigators that ASCPL and other concerns were not conducting any genuine and bona fide business activities because the main objective of these firms was laundering ill-gotten money.
The kickbacks were also parked carefully to channelise them further. Like in the case of four installments (totalling Rs 1.11 crore) received in the account of ASCPL from Span Fibre between November 2007 to May 2008, first, it was put in fixed deposits and later invested in shares of Vasan Healthcare Pvt Ltd. Even the sale of shares was layered and raises eyebrows. One Meera Arun purchased shares of Vasan Healthcare Pvt Ltd for Rs 3 crore and then gifted it to her father who immediately sold the same to ASCPL for Rs 1.5 crore at a loss of Rs 1.5 crore. The payments to Arun's father was not made until shares were acquired by Sequoia Capital in October 2010 at a shocking price. The CBI claims that the Rs 22.50 crore that ASCPL acquired from the sale of the shares of Vasan Healthcare Pvt Ltd to Sequoia Capital India Investments is tainted as it was originally purchased through illegal proceeds.
The evidence further indicates that ASCPL purchased shares of a company named ASG Healthcare for Rs 11 crore and later sold them for Rs 29.49 crore, making a clear profit of Rs 18.49 crore. The CBI has tried to establish that the money was collected by Karti through various companies on behalf of Chidambaram for the favours shown by him to the companies which had transferred money into the account of ASCPL and other concerns.
An interesting para in Delhi High judgment sums up the entire case — "White collar crimes/economic offenders have deep-rooted conspiracies involving a huge amount of public funds and this should be viewed seriously and such offences ought to be considered as grave offences."
Chidambaram gave evasive replies to the probe agencies while he was under protective cover extended to him by the court. That cover is gone and a lookout circular has been issued against the former finance minister. Chidambaram's whereabouts are not known as of now and while Congress is screaming political vendetta, the Former finance minister is running out of tools to manipulate the situation in his favour.
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