What Is INX Media Scam That Led To The Arrest Of Karti Chidambaram?

In May last year, the Enforcement Directorate had filed a case against Karti Chidambaram alleging irregularities in the grant of Foreign Investment Promotion Board (FIPB) clearance to INX Media for receiving foreign investment of over Rs. 300 crore in 2007 when P Chidambaram was the union finance minister.

Karti Chidambaram is accused of taking a Rs.10 lakh bribe in the case. Based on information about alleged illegal payments made by INX media, the CBI filed a separate case against Mr Chidambaram and others.

The FIR filed by the CBI on May 15 last says that Karti had brokered for the Peter and Indrani Mukherjee couple-owned INX Media Private Limited (INX) for issue of foreign investment permits by his father’s ministry, for which payments were made by INX to Advantage Strategic Consultancy Private Limited (Advantage India), with its subsidiary in Singapore (Advantage Singapore).

According to CBI FIR, “Contrary to the approval of FIPB conveyed to through letter dated 31/05/2007 and conditioned mentioned therein, INX media (P) deliberately in violation of the condition of the approval, made a downstream invested to the extent of 26% in the capital of INX news LTD without the a specific approval of FIPB which included indirect foreign investment by the same foreign investors and generated more than Rs 305 crores FID in INX against the approved foreign inflow of Rs 4.62 core by issuing the shares to the foreign investors at a premium of more than Rs 800 per share.

INX had reportedly paid the money to Karti Chidambaram to spare them of any government action.

So who owns the Advantage?

Karti has denied that he owns Advantage.

According to an article in The New Indian Express by Gurumurthy, Karti was the owner of two-thirds of Advantage on record from March 2006 toMay 2011 through Ausbridge Holdings and Investments Private Limited (Ausbridge), which he owned almost entirely. In 2011, Karti transferred the ownership of Ausbridge to Mohanan Rajesh, his close friend.

Another article in The NIE, dated April 26, 2016 titled Will Chidambaram stop lying at least from now?, says that the friends of Karti who hold the shares of Advantage are his benamis, and now fixes the father and son in the CBI case in INX matter. 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, known as Karti’s shadow (211430 shares), Padma Viswanathan and Ravi Viswanathan (32600 shares) and Bhaskararaman (17400 shares), Karti’s other friends.

Excerpt from CBI FIR against Karti Chidambaram: