Delhi High Court has declined Congress leader P Chidambaram’s plea for anticipatory bail and interim protection from arrest in cases of corruption and money laundering related to the alleged INX media scam.
CBI had registered an FIR in May 2017, alleging irregularities in the Foreign Investment Promotion Board (FIPB) clearance given to the INX group for receiving overseas funds of Rs 305 crore in 2007. Chidambaram was Union Finance Minister at the time.
Last year, the Enforcement Directorate (ED) registered a case of money laundering, and the CBI called Chidambaram for questioning. Earlier this year, Chidambaram moved Delhi High Court to seek anticipatory bail in both the cases.
First red flags
In January 2008, the Financial Intelligence Unit (FIU-IND) of the Finance Ministry flagged Foreign Direct Investment of over Rs 305 crore by three Mauritius-based companies in INX Media Pvt Ltd., then owned by Peter and Indrani Mukerjea.
The Income-Tax (I-T) Department in Mumbai forwarded the case to the Enforcement Directorate (ED). In 2010, ED registered a case against INX Media for alleged Foreign Exchange Management Act (FEMA) violations.
Several years later, while investigating a company associated with Chidambaram’s son Karti Chidambaram, ED found documents linked to INX Media in the computer of Karti’s CA Bhaskarraman. The documents indicated payments made to Karti’s alleged company by INX Media at the time the Finance Ministry granted it FIPB approval.
On ED’s reference in this regard, CBI registered a case of corruption in May 2017, and searched premises connected with both Karti and his father P Chidambaram. Following this, ED lodged a case of money laundering against Karti.
Karti was arrested by CBI in February last year. He was later granted bail by Delhi High Court, and is now the Congress Lok Sabha MP from Sivaganga.
The CBI’s case
In its FIR, CBI said that INX Media had approached FIPB on March 13, 2007 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 under the FDI route.
These shares represented 46.21% of the issued equity capital of INX Media.
According to the CBI, in its application to FIPB in 2007, the media company 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".
On May 30, 2007, FIPB cleared FDI of Rs 4.62 crore for INX Media. But 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.
CBI sources had said at the time that the foreign entities bought shares of INX at Rs 862.31 a piece, which was 86.2 times more than their face value. The media organisation also made a downstream investment of 26% in its subsidiary, INX News.
Link to Chidambaram
CBI has alleged that on May 26, 2008, when FIPB sought clarification from INX Media after the I-T Department began its investigation, the media firm engaged Karti Chidambaram, the 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".
CBI has alleged that FIPB, 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 that it had already received.
Timeline: Case against Chidambaram
May 15, 2017: CBI files FIR, alleging irregularities in FIPB clearance to INX Media for receiving overseas funds to the tune of Rs 305 crore in 2007 when Karti Chidambaram s father P Chidambaram was Union Finance Minister.
* The same month, ED files money laundering case in the matter.
June 16, 2017: Foreigner Regional Registration Officer (FRRO) and Bureau of Immigration, under Union Home Ministry, issues look-out circular (LOC) against Karti.
Aug 10, 2017: Madras HC stays LOCs issued against Karti and four others.
Aug 14, 2017: Supreme Court stays HC order.
Aug 18, 2017: SC asks Karti to appear before CBI on August 23.
Sept 11, 2017: CBI tells SC it has furnished details in a sealed cover on the probe about possible transactions abroad and 25 alleged offshore properties of Karti.
Sept 22, 2017: CBI tells SC that Karti was prevented from traveling abroad as he was allegedly closing foreign bank accounts.
Oct 9, 2017: Karti seeks SC s nod to visit the UK to get his daughter admitted at Cambridge University.
Oct 9, 2017: P Chidambaram tells SC that the BJP-led government has been carrying on a politically-motivated vendetta against him and his son.
Nov 20, 2017: SC allows Karti to visit the UK for daughter s admission.
Dec 8, 2017: Karti moves SC challenging summons issued by CBI against him in Aircel-Maxis case.
Feb 28, 2018: Karti arrested by CBI at Chennai airport and brought to Delhi. Delhi court sends him to one-day police custody.
March 5, 2018: Karti moves SC to challenge ED summons issued in money laundering case.
March 6, 2018: Special court sends Karti to 3-day CBI custody.
March 12, 2018: Court sends Karti to 12-day judicial custody. Karti moves Delhi HC seeking bail in the corruption case.
March 15, 2018: SC gives interim protection to Karti from arrest by ED.
March 23, 2018: Delhi HC grants bail to Karti in INX Media corruption case.
May 30, 2018: Chidambaram moves Delhi HC seeking anticipatory bail plea in CBI corruption case.
July 23, 2018: Cong leader moves Delhi HC for anticipatory bail in money laundering case of ED.
July 25, 2018: HC grants him interim protection from arrest in both cases.
October 11, 2018: ED attaches 50% of Chidam-baram s Jor Bagh bungalow
July 11, 2019: Sheena Bora murder case accused and INX Media owner Indrani Mukherjea turns approver
August 20, 2019: HC dismisses anticipatory bail pleas, declines Chidam-baram s request to stay the order for 3 days to enable him to appeal in SC.