Decoded: Allegations Against Karti Chidambaram & What Lies Ahead

Let’s attempt to break down the allegations pertaining to the arrest of Karti Chidambaram in the INX case.

File photo of Karti Chidambaram.

(Photo: PTI)

On 28 February, the country woke up to the breaking news of Karti Chidambaram being arrested at the Chennai airport by the CBI, as soon as he landed from London.

There has been a lot of reportage on the allegations and raids leading up to the arrest of the son of former Union minister and senior Congress leader, P Chidambaram. As is often the case when big names and politicians are involved, the facts get muddled. Let’s attempt to break down the allegations pertaining to the present arrest.

Karti was arrested in connection with the case registered by the CBI on 15 May 2017, in relation to the approvals granted by the Foreign Investment Promotion Board (FIPB) to a company called INX Media. The CBI’s FIR names Karti and his company, Chess Management Services Pvt Ltd, as accused.

A case was also registered by the Enforcement Directorate, which looks into the concealment, possession, acquisition, etc, of the proceeds of crimes.

What is the Case About?

As per the FIR registered by the CBI, in 2007, INX Media Pvt Ltd wanted to bring in foreign investment for their business – relating to broadcasting of television channels by issuing further shares by way of a preferential allotment and issuance of shares – and moved an application for approval by the Foreign Investment Promotion Board (FIPB). At the time, INX was controlled by Indrani Mukerjea and Pratim ‘Peter’ Mukerjea – who are currently languishing in jail on charges of having murdered Indrani’s daughter Sheena Bora.

The same application also sought the approval of making a downstream investment (from one Indian company to another) by INX Media Private Limited in INX News Pvt Ltd, as per applicable law.

The FIPB – which has now been abolished – was under the ambit of the Ministry of Finance and comprised secretary level officers of the government, who would consider and approve the proposals. These recommendations would then be placed before the competent authority, the Finance Minister, for his stamp of approval.

INX Media Pvt Ltd was permitted to allot shares and bring in investment to the tune of Rs 4.62 crore, but was informed that a separate application would be required for downstream investment.

The CBI alleges that INX Media, in violation of the approval, not only went ahead with the downstream investment but also raised over Rs 305 crore when the approval was only for Rs 4.62 crore.

The Income Tax Department raised the matter, but as per the CBI, the FIBP allegedly went out of its way to scuttle the investigation by the I-T officials and alerted INX Media.

What Are the Allegations Against Karti?

According to the FIR, INX Media entered into a criminal conspiracy with Karti Chidambaram to get the issues resolved amicably and without any punitive action by influencing the public servants at the FIPB on account of being the then Finance Minister’s son.

It is alleged that for rendering such services, through companies owned by him directly and indirectly, Karti raised invoices for Rs 3.5 crore and received Rs 10 lakh in particular through a company called Advantage Strategic Consulting Private Limited, which is alleged to have been indirectly owned by him .

These payments were allegedly made in circuitous manner in order to conceal the link with Karti and his influence on government servants.

What’s Next?

After his arrest, Karti was brought to Delhi and was remanded to one-day police custody for further questioning. It is interesting to note that a day before, on 27 February, Bhaskaraman, named in the CBI FIR and accused of helping Karti in his ‘financial matters’, was remanded to 14-day judicial custody after being arrested by ED.

An investigating agency ordinarily arrests an accused if there is lack of cooperation in investigation, or if the accused is a flight risk, or is capable of influencing witnesses or tampering with evidence. The arrested must be brought before a magistrate within 24 hours of the arrest.

It was in this hearing that Karti was sent to one-day police custody. He will have to be produced before a special judge dealing with the CBI matter for further orders. If the judge is convinced of the arguments by the CBI for keeping him in custody, then Karti will be remanded to further custody.

However, what may weigh in his favour is that he has proven to not be a flight risk and has answered all summons issued by the investigating agencies against him. He has joined the investigation, twice with the CBI and ED each and has been questioned extensively.

It must be kept in mind that the case is currently at the stage of investigation and the investigating agencies will collect evidence and finalise the charges against the accused and file a chargesheet.

However, if the chargesheet is not filed within 90 days of the arrest of Karti, the court cannot extend the detention further. The accused shall then be entitled to bail under the provisions of the Criminal Procedure Code.

(The author is an advocate practicing at the Delhi Districts Courts and High Court. This is an opinion piece and the views expressed above are the author's own. The Quint neither endorses nor is responsible for the same.)

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