Explained: CBI’s case against Chidambaramhttps://indianexpress.com/article/explained/cbis-case-against-chidambaram-aircel-maxis-ed-investigation-5466007/

Explained: CBI’s case against Chidambaram

Centre has cleared former Finance Minister’s prosecution in Aircel-Maxis deal case. What are the charges?

Explained: CBI’s case against Chidambaram
Former finance minister P Chidambaram arrives for questioning in the Aircel-Maxis case at CBI headquarters in June this year. (Express Photo/Amit Mehra)

On Monday, the CBI told a special court that the government had granted it sanction to prosecute former Finance Minister P Chidambaram in the Aircel-Maxis case, and that this may be taken on record.

What is the Aircel-Maxis case?

It is an offshoot of the 2G spectrum case. It came to light in May 2011 after Aircel founder C Sivasankaran complained to the CBI that in March 2006, he had been arm-twisted by then Telecom Minister Dayanidhi Maran to sell 74% of Aircel’s stake to the Malaysian company Maxis, owned by T Ananda Krishnan. The CBI registered a case of alleged corruption against Dayanidhi and his brother Kalanidhi Maran in October 2011. In February 2012, based on the CBI FIR, the Enforcement Directorate registered a case of money-laundering against the Marans and others. The CBI FIR alleged that to facilitate the deal, a company owned by Kalanidhi was paid Rs 549 crore apart from infusion of an investment to the tune of Rs 629 crore into Sun Direct TV by Maxis’s sister concern Astro.

Aircel-Maxis case: Centre gave sanction to prosecute Chidambaram, CBI tells court

In August 2013, CBI filed a chargesheet naming nine accused, including the Marans and Maxis owner Krishnan, apart from four companies including Sun Direct TV and Maxis Communications. In April 2015, ED attached assets worth Rs742.58 crore in the name of the Maran brothers and family members. The following year, it filed a chargesheet against the Marans. In February 2017, however, a special CBI court discharged the Marans.

What is Chidambaram accused of?

In December 2014, CBI first examined Chidambaram in connection with the case. He was the Finance Minister when Maxis acquired a stake in Aircel. He is alleged to have played a role in giving Foreign Investment Promotion Board (FIPB) approval for the deal. It was alleged that the Aircel-Maxis deal was worth over Rs 3,500 crore, and should thus, have been referred to the Cabinet Committee on Economic Affairs, as the Finance Minister had authority to clear FDI approvals through FIPB only up to Rs 600 crore. CBI and ED also alleged that a company “indirectly controlled” by Chidambaram’s son Karti received a consultancy fee of Rs 26 lakh from Aircel Televentures Ltd (ATL) in the contemporaneous period of the FIPB approval being given to the Aircel-Maxis deal by the Finance Minister. The CBI and ED have alleged that the company, Advantage Strategic Consulting Pvt Ltd (ASCPL), is run by Karti through his aides as directors. ED has also attached assets worth Rs 1.16 crore belonging to Karti.

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Karti Chidambaram gave a written undertaking to appear before the concerned IT official on June 28.
Chidambaram’s son Karti.

What is Chidambaram’s defence?

In response to a summons sent to him and his son Karti in the case and searches conducted at his premises, Chidambaram said the actions of CBI and ED were “political vendetta” and an attempt by the NDA government to “silence his voice”. The Chidambarams argued that the agencies had no locus standi to investigate them since all the named accused had been discharged. In response, the CBI and ED argued that the accused had been discharged but the FIR stood, as it had not been quashed. The agencies not only challenged the lower court’s decision to discharge the accused but also informed the competent court that they were probing the Chidambarams’ role in connection with the granting of FIPB approval. In his appearances before CBI and ED, Chidambaram said all decisions with regard to the Aircel-Maxis deal were above board, recorded on file, and taken by the FIPB board.

What does the CBI chargesheet say?

In July, the CBI filed a chargesheet against Chidambaram alleging that he was aware that foreign investment into the Aircel-Maxis deal was for over Rs 3,200 crore, and yet did not refer the matter to the CCEA. It told the court that in lieu of the approval, companies controlled by Karti were paid over Rs 1 crore. According to the chargesheet, days after FIPB approval was given, Rs 26 lakh was paid to ASCPL, and a company associated with Maxis paid another Rs 87 lakh to Chess Management Global where Karti is a director.

CBI also arraigned as accused retired senior bureaucrats Ashok Chawla and Ashok Jha. When approval for foreign direct investment into Aircel was given by FIPB, Chawla was additional secretary in the Department of Economic Affairs (DEA) and Ashok Jha was the secretary. Among other accused are DEA officials Kumar Sanjay Krishna, then joint secretary; Deepak Kumar Singh, then director, and Ram Sharan, then under secretary. Other accused include Karti’s chartered accountant S Bhaskarraman, his company’s executive A Palaniappan, Aircel owner Krishnan, his employee V Srinivasan and Agustus Ralph Marshal. Several companies were also mentioned as accused in the chargesheet.

What are the ED’s charges?

The ED filed a prosecution complaint against Chidambaram in October. Apart from repeating CBI’s allegations, the ED claimed it had enough evidence to prosecute Chidambaram, which included email communications and material evidence to connect financials of Karti and P Chidambaram. “These evidences are in the form of emails communication retrieved from the seized digital devices from Sh Karti P Chidambaram and his associates. The material evidences inter alia, reveal routing of proceeds of crime in the guise of bona fide business deals by the beneficiaries of illegal FIPB approval in the companies of Sh Karti P Chidambaram. ED investigation has revealed the financial linkage of Sh Karti P Chidambaram and Sh P Chidambaram with these companies,” an ED statement said.

ED also alleged that foreign investments exceeded what was allowed. It said FIPB approval under automatic route to Global Communication and Services Holdings Limited (GCSHL), Mauritius (wholly owned subsidiary of Maxis Berhad, Malaysia), which held 26% equity ($280 million), was to be given further to hold only 48% ($516.92 million) directly and indirectly. “… The approval by FM allowed foreign investment up to $800 million (which was shown in the records as Rs 180 crore ($40.75 million approx) ). This approval has resulted into the permission of bringing foreign investment more than the required foreign funds, with a design to have investment by GCSHL to the extent of 100% under a conspiracy,” ED said.

What happens next?

The CBI claim opens up the possibility of Chidambaram facing trial. Father and son may also be investigated in certain other cases arising out of the probe. ED has sent references about at least two companies to CBI, which allegedly received FIPB approvals from Chidambaram around the time they made payments to companies associated with Karti.

Another such example is the INX Media case which has Indrani and Peter Mukerjea as accused along with Karti. During a search, ED found documents that allegedly showed Karti’s companies had a role to play in FIPB approval given for FDI in INX Media.