CBI raids Karti Chidambaram, alleges he got father’s ministry to clear FDI for INX media

The CBI has alleged that the INX Media’s FDI proposal was “deceitful and fallacious” but was approved by then Finance Minister P Chidambaram.

Written by Deeptiman Tiwary , Khushboo Narayan | New Delhi | Mumbai | Updated: May 17, 2017 3:59 am
karti chidambaram, p chidambaram, cbi raids, Karti chidambaram CBI raid, inx media, peter mukherjea, indrani mukherjea, chidambaram cbi raids, india news, indian express news Karti Chidambaram. (File photo)

THE Central Bureau of Investigation on Tuesday conducted raids at premises linked to Karti Chidambaram, son of former Finance Minister P Chidambaram and the residence of Peter Mukherjee and Indrani Mukherjee among 14 locations spread across Mumbai, Chennai and Delhi NCR in connection with a case of alleged corruption.

The raids were conducted after CBI filed an FIR against Karti and INX Media among others for alleged irregularities in FIPB approval given to the media house for foreign direct investment (FDI) in 2007.

Read | CBI raids Karti Chidambaram, alleges he got father’s ministry to clear FDI for INX media

The CBI has alleged that the INX Media’s FDI proposal was “deceitful and fallacious” but was approved by then Finance Minister P Chidambaram.

The CBI FIR has alleged that INX’s FDI inflow had been initially flagged by FIPB for irregularities and it had sought clarification from the media house. However, after it roped in a company owned by Karti Chidambaram for consultancy, its fresh proposal was approved by FIPB “by virtue of influence exercised over them by Karti P Chidambaram”, the CBI FIR says.

Read | Govt trying to silence my voice, will still speak, write: P Chidambaram

By doing this, the CBI has alleged that the officials “not only ignored the serious illegality on the part of M/S INX Media… but also embraked on showing undue favour to INX Group by abusing their official position”.

In return of the services, CBI has alleged, Karti Chidambaram got a payment of Rs 10 lakh through Advantage Strategic Consulting, “which was controlled by him (Karti) indirectly”. It has also alleged that it got vouchers of payments of Rs 3.5 crore from INX Media to various companies allegedly associated with Karti and “where there are common directors”.

Read | Not just INX, ED sends summons to many firms that dealt with Karti-tied companies

The agency has registered the case against INX Media through its director Indrani Mukerjea, INX News; through its director Peter Mukherjea, Karti Chidambaram, Chess Management Services through its director Karti; Advantage Strategic Consulting through its director Padma Vishwanathan and unknown officers of Finance Ministry.

Both Karti and his father P Chidambaram are also facing a probe by the CBI and Enforcement Directorate in the Aircel-Maxis deal. Premises connected to Karti Chidambaram have earlier been searched by ED in connection with its alleged money laundering probe into the case. ED had recently said in a press statement that it was probing the role of P Chidambaram in the grant of FIPB approval in the Aircel Maxis deal case. Although a special court has discharged Dayanidhi Maran in the case, ED has gone to the High Court challenging the order.

The INX Media case has been on the radar of investigative agencies as early as January 2008 when the Financial Intelligence Unit (FIU-IND) flagged the foreign direct investment of over Rs 305 crore by three Mauritius-based companies in INX Media Pvt Ltd (now called 9X Media Pvt Ltd), formerly owned by Peter and Indrani Mukerjea.

The alert generated by the FIU was picked up by the investigation wing of the Income Tax (IT) department in Mumbai,which later forwarded the case to the Enforcement Directorate (ED). In 2010, ED registered a case against INX Media for alleged violations of the Foreign Exchange Management Act (FEMA).

According to the CBI FIR, on March 13, 2007, INX Media approached the FIPB for permission to issue 14.98 lakh equity shares and 31.22 lakh convertible non-cumulative redeemable preference shares of Rs 10 a piece to three non-resident investors — Dunearn Investment (Mauritius) Pte Ltd; New Silk Route PE Mauritius LLC and New Vernon Pvt Equity Ltd under the FDI route. These shares represented 46.21 percent of the issued equity capital of INX Media.

INX Media, according to CBI sources, sought this approval to start a music channel, 9XM, a Hindi general entertainment channel (GEC) and multiple vernacular entertainment channels.

The CBI said the media firm, in its application to FIPB in 2007, also mentioned its intention to “make a down stream financial investment to the extent of 26 per cent of the issued and outstanding equity share capital of INX News Pvt Ltd, a subsidiary of INX Media.”

While the FIPB granted permission to INX Media on May 30, 2007 to bring in FDI of Rs 4.62 crore, 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. According to sources, the foreign entities bought shares of INX at Rs 862.31 a piece, which was 86.2 times more than the face value of the shares.

The media firm also made a down stream investment of 26 per cent in its subsidiary, INX News.

The CBI has alleged that on May 26, 2008, when the FIPB sought clarification from INX Media after the Income Tax department began its probe, the media firm engaged Karti Chidambaram, 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.”

The CBI has alleged that Karti Chidambaram exercised influence over certain FIPB officials and the department, 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 already received by it.

According to the CBI, INX Media was later granted FIPB permission for the investment in violation of norms.

In 2008, the media firm launched NewsX, an English news channel. Within a year of launch, the news channel was sold to Indi Media Network, a joint venture between Nai Duniya owner Vinay Chhajlani and Jehangir Pocha.

In March 2009, Peter and Indrani exited the company after selling their 30% stake in the loss-making INX Media. In April 2010, the Hindi GEC of the company was sold to Zee Network for Rs 64 crore.

The same year, INX Media was renamed as 9X Media. Subsequently, in 2011, New Silk Route increased its stake in the company to 80% by buying out all the other private equity investors in the company.

Both Peter and his wife Indrani, founders of INX Media, are accused in the Sheena Bora murder case and are lodged in jail in Mumbai.

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  1. R
    romi
    May 17, 2017 at 10:43 pm
    some frustrated congi OR modi haters have nothing but to abuse pappu dare to discuss scams in your party OR even dare to codemn the guilty in your party - It is believed that always the 3rd or 4th generation ruins all good that the previous generation did - pappu is the 4th generation of his
    Reply
    1. S
      Sankaran Krishnan
      May 17, 2017 at 6:48 pm
      Unable to digest how the corrupt Chidambaram of congress party indulged in corrupt practices to promote his son and it is better to investigate thoroughly whether these Politician and his son involved with the murder case also and for the sake of power they hold at that time these persons can't be trusted and will go to any extent to get and extract money through them and through s companies using them as benamis !!!
      Reply
      1. K
        KAPIL DEV
        May 17, 2017 at 11:44 am
        The all so called congress and pseudos secular took bribe via purchase of shares of the company which was on paper . the leaders purchased the share at rupee ten suddenly manipulated and rose to 100 thus paying bribery indirectly . now modi govt. has exposed their fraud and cheating. in the name of POLITICAL vendetta TO ESCAPE. they want to justify their bribery . They all must be hanged who looted the public wealth ?.
        Reply
        1. D
          Deepak
          May 17, 2017 at 9:52 am
          The Safron Regime in power has unleashed Gau Rakshaks, Hindu Yuva vahini, VHP and Bajrang dal on Minorities and dalits. Now they have unleashed CBI on opposition in same way. Vyapam, Lalit Gate, HydelPower scam, Mining scam, and many other scam in which so many BJP leaders involved are not important for them.
          Reply
          1. C
            Chandu Shah
            May 17, 2017 at 5:46 pm
            You must be congi and very unhappy. I am very happy. BJP must find something against pappu and Sonia and put them away
            Reply
          2. K
            KAPIL DEV
            May 17, 2017 at 9:42 am
            nexus of corrupt leaders who have looted the nation wealth are all c , c maserey bhai . THEY never imagined that they will face humiliated defeat by a ordinary leader CHAI, TEA VENDOR . THEIR CORRUPT ACTS ARE NOW EXPOSED and they call is political vendetta . when GUJARAT CM NARENDRA MODI WAS QUESTIONED BY CBI FOR NINE HOURS AND AMIT SHAH WAS ARRESTED AND PEACE LOVING DEVOTEES OF BABA RAM DEV WERE BEATEN IN THE DEAD OF NIGHT LIKE THIEVES, IT WAS NOT POLITICAL VENDETTA . RIGHT FROM SONIA , RAHUL , MAMTA BEGUM, MULLA LALU, CHIDEMBRUN AND THEIR COLLEAGUES LOOTED THE NATION . ARE NOW EXPOSED . LET THEM FACE THE LAW . DONT MAKE EXCUSE OF POLITICAL VENDETTA YOU CAN NOT SAVE YOUR SELF BY ALLEGING POLITICAL VENDETTA . IN YOUR SIXTY YEAR SCAM RULE YOU DONE NOTHING EXCEPT TORTURING BJP AND AKALI DAL WHEN YOU KILLED THOUSAND OF INNOCENT SIKHS BY PLACING BURNING TYRES IN THEIR NECK , KILLED THEM AND BURNT THEIR HOUSES LALU FAMILY AMASSED 1000 CRORE WEALTH FROM WHERE HE SHOULD TELL?
            Reply
            1. A
              Atul
              May 17, 2017 at 9:32 am
              Only Gau Rakshaks, Hindu Yuva Vahini, Bajrang Dal, RSS are above Law. In their case it is the victim who is arrested and they have free hand and roam freely to lynch new elder from Minority or dalits community.
              Reply
              1. M
                Mohan Menon
                May 17, 2017 at 12:53 pm
                Keep bleeding !
                Reply
              2. M
                Murthy
                May 17, 2017 at 9:23 am
                Something the entire WORLD knew, most of all every Indian - it was that under the UPA Sarkar, nothing would happen UNLESS you used a "Consultant" !! Unfortunately, one term of honest and well-intentioned governments cannot change the Tehsildar's office, pressurising them to issue 'Katta' / Patta' or register property purchased' without the intervention of a "Consultant". Foundation of Corruption Raj lies in a) delaying tactics, b) Deliberate 'mis-laying' of do ents and c) Destroying do ents in official files to make it impossible for bosses to work out what had gone wrong. Remember 20 files went 'missing' from ManMohan Singh's PMO premises - all related to 2-G !!
                Reply
                1. G
                  Gautam
                  May 17, 2017 at 9:23 am
                  Most Murderous in power see opponents corrupt to suppress them but will fail and pay price as soon as they are out of power.
                  Reply
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