Noose tightens around ‘Kingpin’ Chidambaram

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Supreme Court on Thursday, September 5, 2019, refused to grant anticipatory bail to P Chidambaram over allegations of money laundering in the INX Media case. The apex court said that grant of anticipatory bail at this stage would hamper investigations. Now, Chidambaram faces arrest by the Enforcement Directorate.
Supreme Court on Thursday, September 5, 2019, refused to grant anticipatory bail to P Chidambaram over allegations of money laundering in the INX Media case. The apex court said that grant of anticipatory bail at this stage would hamper investigations. Now, Chidambaram faces arrest by the Enforcement Directorate.

The corruption cases involving senior Congress leader P Chidambaram, who is also a sitting member of the Rajya sabha and influential member of Congress Working Committee (CWC) have been in the limelight ever since CBI (Central Bureau of Investigation) and ED (Enforcement Directorate) officials arrested him from his residence on August 21 night. In a dramatic turn of events CBI officials had to scale the walls of Chidambaram’s Jor Bagh residence to arrest him as he made himself unavailable for the first 27 hours after his anticipatory bail plea was rejected by Delhi High Court saying that the INX media case was a “classic case of money laundering” and the facts prima facie reveal that Chidambaram is the kingpin and the key conspirator in the case.

Chidambaram is facing charges of corruption in a 2007-08 case related to FIPB (Foreign Investment Promotion Board) approval for foreign funds to the tune of Rs 305 crore. CBI is probing corruption angle in the INX Media case and ED is investigating charges of money laundering.

Background

CBI in its probe found that there were irregularities in the grant of FIPB clearance of INX Media. INX Media was owned by media entrepreneurs Peter Mukerjea and his wife Indrani Mukerjea who are currently in a Mumbai jail for killing Sheena Bora, Indrani Mukerjea’s daughter from her ex-husband. In March 2007, INX Media had approached the finance ministry for issuing 14.98 lakh equity shares and 31.22 lakh convertible non-cumulative redeemable preference shares. Each share was to be priced at Rs 10 a piece and was to be owned by three non-resident investors under the FDI norms. The finance ministry approved the request in May 2007. Back then Chidambaram was the finance minister. This implied that INX Media was allowed to receive foreign fund of Rs 4.62 crore. But the company went on to receive foreign funds to the tune of Rs 305 crore from three Mauritius-based firms. INX Media also invested money in INX News which is another violation of the FIPB order. Thus this media group managed to flout the conditional FIPB approval and received foreign funds of Rs 305 crore against the approved inflow of Rs 4.62 crore. CBI probe reveals that the foreign firms bought each share for Rs 862.31 that was at a price more than 86 times of the face value.

His son, Karti Chidambaram, is also accused in this case as he is the founder director of Chess Management Services — the company which was engaged by INX Media to settle the matter amicably with finance ministry when income tax department, ED and financial intelligence unit raised questions and sought clarification from INX media.

Karti is said to have used his influences in his father’s ministry in 2008 to favour INX Media, and P Chidambaram was party to all this fraud. This has been backed by a statement from Indrani Mukerjea, who has turned approver in this matter on July 4 this year. Indrani Mukerjea has said it clearly that INX Media got a favourable deal after she had a meeting with P Chidambaram seeking FIPB clearance in 2008.

The Questions

In his defence, Chidambaram has said that FIPB decisions were taken by Finance Ministry officials and the FIPB. Now the question arises as to why the board members and ministry officials would have a soft corner for INX Media group without any motive. Were they bribed? Were they pressurised by the then finance minister P Chidambaram? Or Chidambaram simply connived with them? In either of the case, it points to culpability of the then finance minister Chidambaram.

CBI even called Sindhushree Khullar, former CEO Niti Aayog, to confront her with Chidambaram to cross check his claim. Khullar was additional secretary in the Department of Economic Affairs when Chidambaram was finance minister.

Definitely there are layers and layers of concealing and involvement of the then finance minister which cannot be denied outright. But Chidambaram and his son have accused government of running a vilification campaign against them to demonize and humiliate them. Karti called it a political witch hunt and went on to say that outrageous media leaks are the preferred tactics of Enforcement Directorate. P Chidambaram too has been evasive and non-cooperative in his replies during his questioning and has even objected to ED handing over the investigation material to the court in a sealed cover.

How were the anomalies detected

In January 2008, the financial intelligence unit of the finance ministry found an anomaly in money flow from three Mauritius-based firms into a media venture called INX Media. As it involved foreign funds, the Income Tax Department in Mumbai forwarded this case to the Enforcement Directorate (ED), which began probing the flow of funds to see if money was laundered. The ED investigation pointed towards large scale corruption with involvement of powerful people. The ED then referred the matter to Central Bureau of Investigation (CBI), which registered an FIR in INX Media case on May 15, 2017. Last year, ED too lodged a separate case of money laundering. Chidambaram has been booked under Sections 420 and 120B of IPC (Indian Penal Code) and the Prevention of Money Laundering Act. His son, Karti was also arrested by the CBI on Feb 28, 2018 for 12 days. Last year in May Chidambaram had moved to the courts seeking interim protection fearing arrest in the case, and had been enjoying interim protection against arrest for the past 13 to 15 months. The big point is that no common man enjoys such protection for so long. And still he cries vendetta politics.

Probe findings

In its probe against Chidambaram in money laundering case, ED found that financial intelligence unit has given specific inputs that former finance minister and his co-conspirators had accounts or valuable properties in Argentina, Austria, British Virgin Islands, France, Greece, Malaysia, Monaco, Philippines, Singapore, South  Africa, Spain and Sri Lanka. ED also told the Supreme Court that persons with “close” links to Chidambaram had set up a web of shell companies in India and abroad to launder money. The shell companies have been created so as to make it difficult for law enforcement agencies to track the money trail. According to the ED, accounts of one of the shell companies has been closed and another account has been opened by a co-conspirator. All this to fool the agencies. Chidambaram and his co-conspirators have changed the share holding pattern of shell companies and have made changes in directors so as to distance himself and his family from the money already laundered and invested. ED claims that 17 benami foreign bank accounts have been found through which money is laundered.

The ED in its response to the apex court said that it has found, “Two individuals ….acted as agents of Chidambaram and interacted with the parties applying for FIPB approval including INX Media as well as collected the proceeds of crimes on behalf of/at the behest of petitioner- accused”. CBI sought Chidambaram’s custodial remand only after the triple test of flight risk, non-cooperation and tampering got satisfied. According to ED, Chidambaram and his co-conspirators not only tampered with the documents but also influenced the witnesses.

The father-son duo are also facing charges in another case of controversial FIPB clearance of Rs 3,500 crore which is related to Aircel-Maxis deal of 2006. Only the Cabinet Committee on Economic Affairs was empowered to clear it but P Chidambaram, one of the most powerful ministers in erstwhile UPA government Okayed it in his capacity as finance minister as his own son was party to it. The ED is also probing money laundering angle in the Aircel-Maxis deal.

With the ongoing probe by CBI and ED, it is sure that what has so far been seen is just the tip of iceberg. Much will be revealed in the upcoming days.

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