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INX Media money laundering case: Delhi court sends Karti Chidambaram to one-day police custody

Earlier this morning, CBI had arrested Karti Chidambaram from Chennai for violating the Foreign Exchange Management Act. Karti was taken into custody by a team of CBI officials at the Chennai airport on his return from UK.

Edited by: India TV News Desk, New Delhi [ Updated: March 01, 2018 7:16 IST ]
Karti Chidambaram, son of former union minister P
Karti Chidambaram, son of former union minister P Chidambaram escorted by police personnel to the Patiala House court in New Delhi on Wednesday

A Delhi court today sent Karti Chidambaram to one-day police custody and said that the hearing on the Central Bureau of Investigation's (CBI) plea seeking 15-day remand will be resumed tomorrow at 12:30 pm.

Earlier today, the CBI produced Karti before the Patiala House Court here and sought 15-day custody to interrogate him in connection with the probe into the grant of FIPB approval in INX Media case. 

According to news agency PTI, the CBI also told the court that Karti is not cooperating in the investigation. To this, Karti's Counsel Abhishek Manu Singhvi said that his client has no connection with the Advantage Strategic Consulting (P) Limited which allegedly received kickbacks and always cooperated with the ED and the CBI in the case.

The investigative agency had arrested him from Chennai earlier this morning for violating the Foreign Exchange Management Act. Karti was taken into custody by a team of CBI officials at the Chennai airport on his return from the United Kingdom, they said. 

Karti (46), son of former Finance Minister P Chidambaram, was produced before Metropolitan Magistrate Sumeet Anand who allowed the request of his lawyers to have an interaction with the accused inside the courtroom. The court allowed Karti and his lawyers to interact for 10 minutes, after which the proceedings resumed.

In its remand application filed in the court, the CBI claimed that sustained interrogation of Karti was needed to unearth the "total conspiracy" hatched in the case and also to find out the details of overseas payments allegedly received by him from INX Media as a "quid pro quo".

"Thus, Karti Chidambaram needs to be subjected to sustained interrogation for unearthing the total conspiracy hatched in the case and also to find out the details of overseas payments received by him from INX Media as a quid pro quo for influence exercised by him over the public servants to scuttle the punitive action required to be taken against M/S INX Media (P) Ltd for the illegal acts of receiving excess investment than the approved FDI and also for making of downstream investment without the FIPB approval. For this purpose, his police custody remand for a period of 15 days is considered essential," the CBI said in the court.

The CBI had lodged an FIR on May 15 last year alleging irregularities in the Foreign Investment Promotion Board (FIPB) clearance to INX Media for receiving overseas funds to the tune of Rs 305 crore in 2007 when P Chidambaram was the Union finance minister.

The agency has alleged that Karti had received funds to the tune of Rs 10 lakh in the case.

The Enforcement Directorate (ED) has also registered a money laundering case in the INX Media case.

History of the case

An FIR filed by the CBI on May 15 last year had alleged irregularities in the FIPB clearance to INX Media for receiving overseas funds to the tune of Rs 305 crore in 2007 when Chidambaram was the Union finance minister. It is alleged Karti had received funds to the tune of Rs 10 lakh in the case, they said. 

The CBI alleged Karti also received money from INX media to scuttle a tax probe. The firm was owned at the time by Peter and Indrani Mukerjea, who are currently in jail on charges of murdering Indrani's daughter Sheena Bora. 

The Enforcement Directorate has also registered a money laundering case. 

Also read | INX media case: Delhi court sends Indrani Mukerjea to CBI custody for 2 days

The CBI and the ED had carried out a series of raids on the houses and offices owned by the Chidambarams. Karti Chidambaram was questioned several times by the ED. 

A lookout notice, which prevents a passenger from travelling abroad, was issued against him as the agencies suspected that he would try to close the foreign accounts where he had parked the money from the kickbacks. In November, the Supreme Court allowed Karti Chidambaram to go to the UK for his daughter's admission in the Cambridge University. 

His father was not available for comments but had earlier denied the involvement of his son in any case. 

The CBI is also probing the alleged irregularities in grant of the FIPB clearance to the Aircel-Maxis deal in 2006. 

According to the CBI, INX Media clearly states in its records that Rs 10 lakh was given to Advantage Strategic Consulting (P) Limited, a firm "indirectly" owned by Karti, for management consultancy charged towards FIPB notification and clarification. 

The FIR also alleges that invoices of approximately Rs 3.5 crore were raised in favour of INX group in the name of other companies in which Karti had substantial interests "directly or indirectly". 

The agency has registered an FIR against Karti, his company Chess Management Services, the Mukerjeas, INX Media, Advantage Strategic Consulting Services and its Director Padma Vishwanathan. 

The allegations levelled by the CBI are based on the information given by "source", the FIR has claimed. 

INX Media was seeking investment from Mauritius, an official explained. 

The investment was allowed by the FIPB board and the then Finance Minister with the condition that only Rs 4.62 crore could be received and for investment in INX News Pvt Ltd, a separate proposal was required. 

The company allegedly violated the conditions set by the FIPB and received investment to the tune of 26 per cent in the capital of INX News which included foreign investment. 

It allegedly generated more than Rs 305 crore of FDI in INX Media against the approved inflow of Rs 4.62 crore by issuing shares to foreign investors at a premium of more than Rs 800 per share. 

The violation prompted an Income Tax department probe. INX Media claimed that the investment was done as per FIPB conditions. 

In order to wriggle out of the situation without any punitive action, INX Media entered into criminal conspiracy with Karti whose father was the Finance Minister of the country, the agency alleged. 

It said officials, by virtue of the influence, exercised over them by Karti, not only allegedly ignored serious illegalities on the part of INX Media but also showed undue favours by abusing their official position and advised the company to file for fresh clearance.

(With inputs from agencies)

Watch video: CBI arrests Karti Chidambaram in money laundering case

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