Former Union finance minister P Chidambaram faces imminent arrest as the Delhi high court did not honour his anticipatory-bail plea and the Supreme Court willing to hear the bail plea only on Friday, the 23rd.
Bengaluru: Whenever one thinks of former Union minister P Chidambaram, the images that conjure up in one’s mind are that of a man who is clad in bright white clothes, spot-on with his vocabulary and a genteel accent, gentlemanly in his deportment and everything that can be associated as positive.
But, at the same time, it makes us shudder when we say that his name figures in the list of those who are involved in money-laundering case.
On Tuesday, that is on August 20, the Delhi high court declared that it would not be possible to grant Chidambaram anticipatory bail as the court deemed that the petitioner, Chidambaram, prima facie appears to be the kingpin in the entire scam and does not merit to be awarded bail. So that does speak volumes about his role in the money laundering case.
But the Supreme Court will hear the matter only on Friday the 23rd.
But what is this money laundering case all about?
Well, it all began in the year 2007 when the accused Chidambaram was the Union finance minister.
The INX media, promoted by Indrani Mukerjea and her husband Peter Mukerjea, was given Foreign Investment Promotion Board or FIPB clearance for receiving overseas funds of Rs 305 crore.
In the year that followed, that is January 2008, the Financial Intelligence Unit, a part of the Finance Ministry flagged the issue of Foreign Direct Investment of over Rs 305 crore by three Mauritius-based companies in INX Media.
Later, the Income Tax department brought the matter to the notice of the Enforcement Directorate. In 2010, the ED put INX Media in a tight spot as it registered a case for alleged Foreign Exchange Management Act or FEMA violations.
But in 2017, that the CBI had registered an FIR, saying there were irregularities in the Foreign Investment Promotion Board (FIPB) clearance given to the INX group.
What role does Karti Chidambaram have in this case? Well, when the ED was investigating a case related to a company owned by Karti Chidambaram, it stumbled upon files related to INX media on the computer of Karti’s chartered accountant Bhaskarraman.
The files contained details of payments made to Karthi’s company by INX media, coincidentally, at the same time the finance ministry countenanced the overseas funds of Rs 305 crore.
It was based on this finding that the CBI registered a case of corruption against both Karti and father Chidambaram in the money laundering scam.
As per an Indian Express report:
According to the CBI, in its application to FIPB in 2007, the media company also mentioned its intention to “make a downstream financial investment to the extent of 26% of the issued and outstanding equity share capital of INX News Pvt Ltd, a subsidiary of INX Media”.
On May 30, 2007, FIPB cleared FDI of Rs 4.62 crore for INX Media. But it rejected the proposal of downstream investment of INX Media in INX News.
The CBI has alleged that INX Media flouted the conditional approval of FIPB, and brought in over Rs 305 crore of FDI in the firm against the approved inflow of Rs 4.62 crore.
CBI sources had said at the time that the foreign entities bought shares of INX at Rs 862.31 a piece, which was 86.2 times more than their face value. The media organisation also made a downstream investment of 26% in its subsidiary, INX News.
Here’s the role played by Chidambaram.
As per reports, CBI had alleged that on May 26, 2008, when FIPB sought clarification from INX Media after the I-T Department began its investigation, the media firm engaged Karti Chidambaram, the promoter director of Chess Management Service (P) Ltd, to “amicably” resolve the issue by “influencing the public servants of the FIPB unit of Ministry of Finance by virtue of his relationship with the then Finance Minister, P Chidambaram”.
CBI has alleged that FIPB, instead of investigating the case, extended undue favours to the media firm by asking INX News to apply for fresh FIPB approval on the downstream investment that it had already received.
To make matters worse for the Chidambarams, Indrani Mukerjea agreed to turn approver in the corruption case on July 11, 2019.
She said that Chidambaram asked her husband Peter to help his son Karti in his business and make possible overseas remittances in lieu of FIPB approval.
She further added: “Karti asked $1 million could be transferred into an overseas account either owned by him or his associates in order to sort the matter. When Peter said overseas transfer won’t be possible, he suggested names of two firms ‘Chess Management’ and ‘Advantage Strategic’ as alternatives to make payments.”
In fact, later in the day, there were news reports that Chidambaram had taken kickbacks in several other scams to tune of Rs 300 crore!
Though Chidambaram, in his argument, in the court, charged the government of vindictiveness, the Delhi High Court didn’t grant him any relief.
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