Wednesday, October 28, 2020
Home Politics All you need to know about the INX Media scam

All you need to know about the INX Media scam

Karti Chidambaram, son of former Finance Minister P Chidambaram in UPA government was arrested earlier today in connections with the INX Media Scam. Karti was arrested in Chennai as soon as he landed from his British Airways flight. The CBI had filed an FIR in the INX scam case in May 2017 alleging that Karti had received a bribe of Rs 3.5 crores from the Peter and Indrani Mukherjee owned INX Media Pvt Ltd. INX Media was later named as 9X.

The INX Media Scam can be briefly explained as follows:

  1. In 2007, INX Media, which was owned by Peter and Indrani Mukherjee received a foreign investment of about Rs 300 crores. For that INX Media needed clearance from the Foreign Investment Promotion Board.
  2. CBI, in its FIR, had alleged that FIPB regulations were violated. The FIPB norms allowed INX to receive only 4.62 crores, but INX violated the conditions and raised foreign direct investments worth Rs 305 crores by issuing shares to foreign investors.

    Court order that granted detention of Bhaskararaman
  3. P Chidambaram was the Finance Minister when the FIPB proposal was cleared for INX Media and Karti allegedly used his influence in the Ministry not only in clearing the proposal but also in manipulating a tax probe against it.
  4. INX made payments to Advantage Strategic Consultancy Pvt Ltd (Advantage India) and its subsidiary Advantage Singapore.
  5. According to a series of exposes made by S Gurumuthy in the New Indian Express, Karti Chidambaram owned almost two-thirds of Advantage fro 2006 to 2011. Karti has been denying the allegations. Karti owned Advantage through Ausbridge Holdings and Investments Private Limited (Ausbridge) which Karti allegedly owned almost entirely.
  6. Karti allegedly transferred the ownership of Ausbridge to his close friend and aide Mohanan Rajesh because the Media has been probing his links to these companies and apparent conflicts of interest shown by the Finance Ministry.
  7. Out of the five lakh shares of Advantage India, three lakh shares (or 60% ownership) were held in the names of four persons – C B N Reddy, (211430 shares), Padma and Ravi Viswanathan (32600 shares) and Bhaskar Raman (17400 shares). All the four are Karti’s close associates, allegedly even called his ‘Benaamis’. According to the same reports Advantage Ltd has its presence in at least 20 countries. In fact, Bhaskararaman was considered extremely crucial to the case. The ED submitted that it was necessary to detain and question him to establish trail of proceeds of crime, and also get information from him that was in his exclusive knowledge.
  8. In August last year, Karti was confronted with the above persons including Mohanan Rajesh and they were grilled by the agency for hours. In January 2018, Karti was again questioned for several hours by ED after avoiding summons twice. Karti’s aide, and the family’s CA, S Bhaskar Raman was arrested by CBI in February 2018. Indrani Mukherjee had also reportedly admitted before ED that her company had bribed Karti. Indrani Mukherjea and Peter Mukherjea, as submitted by ED in court, syphoned off GBP 90 million which is suspected to have gone overseas through the Hawal route and later on, INX Media filed an application before FIPB for permission to receive funds from Foreign investors. 
  9. Karti’s involvement and favourable clearances by FIPB are also being probed in the Aircel- Maxis scam. Both the scams have taken place while P Chidambaram was the Finance Minister.
  10. Now that Karti Chidambaram has been arrested, speculations are rife that his father P Chidambaram might face inquiry soon too.

Karti’s arrest has opened a lot of fresh questions. How much was his father involved? Was the Finance Ministry reduced to a family money laundering business by the father-son duo during the UPA regime? Further investigations are expected to reveal answers to these.

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