Former Finance Minister P Chidambaram is facing arrest in the INX media case and has moved the Supreme Court against Delhi High Court order on Tuesday, quashing his anticipatory bail plea. The Delhi High Court while rejecting his anticipatory bail on August 20 stated that the former Finance Minister was the "kingpin i.e key conspirator" in the INX media case and called it a classic case of money laundering.
The case
The case dates back to May 2017, when the Central Bureau of Investigation (CBI) filed an FIR alleging irregularities in Foreign Investment Promotion Board (FIPB) clearance to the INX Media company. The CBI accused the company of receiving overseas funds to the tune of Rs 305 crore in 2007 when P Chidambaram was the Union Finance Minister.
INX Media, now called the 9X Media, was a venture promoted by former media baron Peter Mukerjea and his wife Indrani, both of whom are currently in prison in connection with the Sheena Bora murder case. According to a report in The Hindu, a friend of Karthi Chidambaram was the auditor of INX Media.
The CBI alleges that INX Media committed financial fraud and then entered into a criminal conspiracy with Karti Chidambaram, whose father P Chidambaram was then the Finance Minister.
In 2007, INX Media had applied for clearance with the Foreign Investment Promotion Board (FIPB) on March 15. INX Media had sought this approval in order to operate and broadcast a bouquet of channels, including a Hindi entertainment channel and multiple other vernacular entertainment channels. According to the CBI, the Board in its meeting on 18 March 2007 approved an FDI (foreign direct investment) inflow of Rs 4.62 crore into INX Media. But this did not include any approvals from FIPB for the downstream or an indirect investment into INX News by INX media. A downstream investment in an indirect form of foreign investment, where the investment is made through another Indian company.
According to the charges made by the CBI, INX Media, however, in violations of the FIPB approval, went ahead and made a downstream investment in INX News and generated over Rs 305 crore foreign investment in INX Media when the approved amount was Rs 4.62 crore.
For further explanation, read: Explainer: What the INX Media case involving Karti Chidambaram is all about
The charges against Chidambaram
The CBI stated that in order to avoid punitive action for this violation, the media group entered into a 'criminal conspiracy' with Karti Chidambaram, knowing that his father was the then Finance Minister of India.
The CBI said that this was in order to "get the issues resolved/addressed amicably by influencing the public servants of the FIPB Unit of the Ministry of Finance by virtue of his relationship with the then Finance Minister."
The agency also stated that by virtue of the influence exercised over them by Karti Chidambaram, the then Finance Ministry "not only ignored the serious illegality on the part of INX Media (P) on both the counts (on unapproved and unauthorised downstream investment and on excess foreign inflow received) but also deliberately embarked on showing undue favour to the INX group by abusing their official position."
Based on the FIR by the CBI, the Enforcement Directorate (ED) also registered a case against Karti Chidambaram under the Prevention of Money Laundering Act (PMLA), 2002.
In 2018, the Enforcement Directorate raided Chidambaram's residences in Chennai and during those raids, the agency reportedly found documents that were linked to the INX media cases on the computer that belonged to Bhaskara Raman, Karti's chartered accountant. Alleging that they had found a mention of an alleged amount of Rs 3.5 crore from INX Media to Karti, the ED then attached Karti's assets worth Rs 54 crore in India, UK and Spain in connection with the INX Media money laundering case.
In June 2018, P Chidambaram was questioned by the CBI for nearly four hours in connection with the irregularities and the clearance given during his tenure as the Finance Minister. P Chidambaram was currently on interim protection from arrest till Tuesday. Chidambaram's son Karti was arrested on February 28, 2018, he was later granted bail and is currently the Congress MP from Sivaganga in Tamil Nadu. His chartered accountant S Bhaskara Raman was also arrested and released on bail later.