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Ex-finance minister P Chidambaram is on 3 agencies’ radar

Ex-finance minister P Chidambaram is on 3 agencies’ radar
By Ushinor Majumdar

When grilled by the ED, Chidambaram had tried to shift blame to bureaucrats who advised him.

There are multiple investigations against Congress MP P Chidambaram, who went missing for a short while on Wednesday when central agencies came calling soon after the Supreme Court refused to grant him immediate protection from arrest in the INX Media case.

At least three central agencies—the CBI, the Enforcement Directorate (ED) and the income tax department—have probed allegations of corruption against Chidambaram, who is a former Union finance minister. Ironically, the ED and IT department function under the finance ministry.

Last year’s arrest and indictment of his son Karti Chidambaram set the anti-corruption ball rolling for P Chidambaram, who was also grilled multiple times by the agencies. Several of the cases have to do with approval for foreign direct investment (FDI) granted by the Foreign Policy Investment Board (FIPB), which was chaired by Chidambaram as finance minister. The ED has a list of 50-odd companies that were granted approval beyond the capped limit — a prerogative of the FIPB. The agencies have probed charges that these approvals were given in exchange for kickbacks.

Sources have told Mirror that while he was being grilled by the ED, Chidambaram had tried to shift the blame to the bureaucrats who had advised him. There were six senior bureaucrats in the FIPB.

What is the corruption case?

The CBI and the ED have alleged that the father managed approvals after kickbacks were paid to the benami companies that are supposedly owned and controlled by the son. The companies, in India and abroad, are registered in the names of Chidambaram family retainers and the shares are bequeathed by a will to Chidambaram’s granddaughter and Karti’s daughter. Chidambaram has denied these charges, including when it was raised in Parliament.

There are allegations that a single shell company alone received payments of more than Rs 300 crore. The income tax investigation has revealed that these companies hold 27 offshore bank accounts in the UK, Singapore, Spain, Monaco and France, amongst other countries.

There are three properties in the UK allegedly owned by Karti, which were not listed as assets in Chidambaram’s election nomination. Only a portion of one found its way into his 2016 Rajya Sabha election nomination.

There are other properties in a number of countries in Europe, Asia and Africa owned by Karti. The IT department has become interested in them since these were all acquired between 2006 and 2014. Chidambaram was the finance minister from 2008-14.

What is the Aircel-Maxis case?

The CBI and the ED have said that chargesheet has been filed only in a case where approval had been sought for FDI into Aircel-Maxis—an Indo-Malaysian joint telecom venture company which had also been investigated for irregularities in procurement of 2G spectrum. Both father and son have protection till November 1 from a court in Delhi.

Under the FDI policy, the FIPB could grant permission for up to Rs 600 crore, above which the board had to refer the matter to the Cabinet Committee on Economic Affairs (CCEA). Instead, the board granted permission for FDI of Rs 3,500 crore in Aircel-Maxis, which is six times the amount.

Both the CBI and the ED have alleged that this was done as part of a conspiracy in which Karti allegedly received a kickback on behalf of his father who cleared the hefty investment proposal without referring it to the CCEA.

The agencies have said that the son received Rs 26 lakh in his benami company, Advantage Strategic Consulting Private Limited (ASCPL), five days after the FDI approval was granted. Another Rs 90 lakh (at forex prices of the time) was paid into Chess Management Services, of which Karti was a promoter-director, for a compliance software, but the agencies have described it as a bogus transaction. In his defence, apart from claiming that the investigation is a political vendetta, Karti has said that money was paid to him for consultancy services.

In their chargesheet, the agencies have said that the directors of ASCPL did not have any domain expertise to be paid any sort of consultancy fees. Karti has also denied links with ASCPL but the ED has said that the money used to set it up also leads back to Karti.

In total, ASCPL, according to the ED, has received payments from more than 50 companies.

ASCPL also paid Rs 32 crore to its subsidiary Advantage Strategic (Singapore) and the agencies suspect that probing the latter could expose other graft payouts from Indian and foreign entities.

The INX media case

The media company was at the time owned by Peter and Indrani Mukerjea. Later investigations have shown that the money to set up INX Media was provided by a top industrialist.

INX Media applied for approval for 46.22 per cent foreign investment, while the cap was 74 per cent. However, the downstream investment in a news media company required separate approval and was capped at much less by law. Nevertheless, the FIPB, under Chidambaram, had granted the FDI clearance. Investigations had revealed that INX Media had hired ASCPL as a consultant for a hefty fee. The agencies have alleged that this fee was in lieu of the FIPB clearance, paid to Karti’s alleged benami company.
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