Cracking down on Karti Chidambaram in its ongoing probe in the Aricel-Maxis deal, the Enforcement Directorate (ED) on Monday said it has attached Rs 1.16-crore worth of assets belonging to Congress leader P. Chidambaram's son. The son of the former Finance minister is being probed for receiving alleged kickbacks in getting FIPB clearance in the Aircel Maxis deal when his father held the Finance portfolio.
According to an ED official, the probe agency has issued a provisional attachment order under the Prevention of Money Laundering Act (PMLA) and bank accounts and fixed deposits worth Rs 90 lakh were attached after he tried to "sell most of his assets and close certain bank accounts".
"During investigation, it was found that the FIPB (Foreign Investment Promotional Board) approval given in the Aircel Maxis case was given by former Finance Minister P. Chidambaram beyond his mandate," the official said.
The official said that fixed deposits worth Rs 26 lakh issued in the name of Advantage Strategic Consulting Private Limited (ASCPL) were also attached. ASCPL is said to be linked to Karti who "controlled" it through another person.
The agency issued a provisional attachment order, signed by Joint Director and investigating officer of the 2G spectrum allocation cases Rajeshwar Singh, under the PMLA for attaching the assets.
"Enforcement Directorate has attached movable assets held by ASCPL (Advantage Strategic Consulting Private Limited) in the form of fixed deposits to the tune of Rs 26 lakh and movable assets held by Karti P Chidambaram in the form of fixed deposits and balance in saving bank account to the tune of Rs 90 lakh approximately," the central probe agency said.
The firm ASCPL is allegedly linked to Karti and the ED said it was "controlled" by him through another person, identified as S Bhaskararaman, whom Karti had described to the agency as his Chartered Accountant and Chief Financial Officer (CFO), the agency said.
The FIPB approval was supposed to go to Cabinet Committee of Economic Affairs, however, Chidambaram approved it on his own and the amount for FIPB clearance was wrongly projected to conceal the facts.
"During investigation, it was found that a company promoted by Karti and A. Palaniappan, nephew of Chidambaram, allegedly received two lakh dollars from Maxis Group in the guise of software consultancy."
The official said Karti recently sold a house in Gurgaon that the ED was planning to attach.
"This house was given on rent to a company that was granted FIPB approval by P. Chidambaram."
In his reaction, Chidambaramblasted the ED over its allegations, calling them a mix of falsehoods and conjectures.
“The allegations in the Press note(ED) are a crazy mixture of falsehoods and conjectures. The press note is intended to intimidate me and to silence my voice. I will not be intimidated,” Chidambaram said, adding that suitable action in accordance with law will be taken as and when the attachment order is served.
Official sources in the ED said while P Chidambaram states that the "only" charge sheet in the case has been quashed, the FIR still stands and that Karti was not named in that complaint.
"This is a fresh probe against Karti in connection with the Aircel-Maxis case," a source said.
The case pertains to the Foreign Investment Promotion Board (FIPB) approval granted in 2006 by P Chidambaram. The agency said it is investigating "the circumstances of said FIPB approval granted by the then finance minister (P Chidambaram)".
The ED also alleged that Karti has "disposed" of a property in Gurgaon, which he had allegedly rented out to a multi national company "to whom foreign direct investment (FDI) approval had been granted in 2013".
It charged that Karti had "also closed certain bank accounts and attempted to close other bank accounts in order to frustrate the process of attachment" under the PMLA.
The CBI has recently told the Supreme Court that Karti was prevented from travelling abroad as he was allegedly closing several of his foreign bank accounts.
The hearing in the apex court was in connection with another CBI FIR, lodged on May 15, where it has been alleged that irregularities in FIPB clearance to INX Media had occurred, for receiving overseas funds to the tune of Rs 305 crore in 2007.
The agency said FIPB approval in the Aircel-Maxis FDI case was granted in March, 2006 by the then FM even though he was competent to accord approval on project proposals only up to Rs 600 crore and beyond that it required the approval of the Cabinet Committee on Economic Affairs (CCEA).
"In the instant case, the approval for FDI of 800 million USD (over Rs 3,500 crore) was sought. Hence, CCEA was competent to grant approval.
"However, approval was not obtained from CCEA," it alleged.
The agency said its probe revealed that the case of the said FDI was "wrongly projected as an investment of Rs 180 crore so that it need not be sent to the CCEA to avoid a detailed scrutiny."
It added that a payment of Rs 26 lakh was made by Aircel Televentures Limited to ASCPL, the firm allegedly linked to Karti, within a few days of the FIPB approval.
The agency also charged that a firm promoted by Karti and senior Chidambaram's nephew A Palaniappan-- CMSPL--received a sum of about USD 2 lakh from the Maxis group allegedly for procuring a legal compliance software.
It said probe revealed that the "software was designed only for use in India and hence was of no use to a Malaysian company."
The ED said further probe to "identify" other proceeds of crime as well as indirect benefits derived from them is "continuing" in this case.
The agency is probing the Aircel-Maxis deal under the PMLA after taking cognisance of a 2011 CBI FIR in the case.