Karti Chidambaram, his companies and cash

Peter and Indrani Mukerjea’s testimonies would be crucial to seal the CBI’s case against him.

WrittenBy:Shantanu Guha Ray
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The arrest of Karti Chidambaram, son of former finance minister P Chidambaram, has triggered speculation that the Central Bureau of Investigation (CBI) is close to nailing the duo for alleged money-laundering and benami holdings of assets.

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But it has not happened yet; India’s biggest probe agency is known for messing up some of its biggest investigations – the latest example being the 2G scam that looked to many as a simple, open and shut case.

The CBI has alleged that Karti received money from INX Media, owned by Peter and Indrani Mukerjea, and, in turn, stopped income tax officers from conducting a probe against the company. It was around the time when his father was the finance minister.

The CBI produced documents to prove that the Foreign Investment Promotion Board (FIPB) cleared an investment into INX Media during Chidambaram’s tenure, and INX invested money in Karti’s firm, Advantage Strategic Consulting Services.

Advantage India has a Singapore subsidiary which, in turn, has investments across the world. CBI officials claim they have documents which prove that though permission was given by the FIPB to INX to bring in only Rs 5 crore, the media outfit brought in a little over Rs 300 crore through some companies registered in Mauritius.

The INX Media case surfaced in December 2015, when the CBI was probing Karti for his alleged involvement in the Aircel-Maxis case.

In April 2015, the Enforcement Directorate (ED) issued a show-cause notice to Karti and a firm purportedly linked to him for alleged violations of Foreign Exchange Management Act(FEMA) laws to the tune of Rs 45 crore. Also, the agency issued a similar notice to Chennai-based Vasan Health Care Private Ltd for alleged forex violations of Rs 2,262 crore.

CBI and ED sources claim the Chidambarams could face more heat in the Aircel-Maxis case that pertains to the forced selling of Aircel in 2006 by its owner, entrepreneur C Sivasankaran, allegedly under pressure from former Union telecom minister Dayanidhi Maran. To return the alleged favour, Maxis invested around Rs 47 crore in the Sun Group, owned by Maran’s brother, Kalanithi. And it was Karti who allegedly facilitated the whole transaction through his firm Advantage Consulting and passed along the bribes.

In April, 2016, financial consultant and editor of Chennai-based Tughlaq, S Gurumurthy, alleged that P Chidambaram and Karti owned controversial firm Advantage Strategic Consulting Pvt Ltd through benami names. The duo, in the past, has constantly declined having ownership in the firm and said it belonged to their friends.

Gurumurthy said he had access to wills, signed by current shareholders in Advantage, stating that after their death, the shares in Advantage will go to Aditi Nalini Chidambaram, daughter of Karti. The wills mention Karti as their executor. These documents were seized from Karti’s vault by sleuths in joint raids conducted by the income tax department and ED in December 2015.

Benami deals are based on secret trust between the benamis and the real owner and require no documentation. However, Karti – claimed Gurumurthy – documented all these in the wills mentioned above, which prove the use of benami approach. Advantage, alleged Gurumurthy, holds 90,000 of 1.5 lakh shares in Vasan Eye Care, the South India-based eye care chain. Vasan has faced allegations of being a front for laundering Karti’s black money into the firm.

Gurumurthy alleged that Advantage Singapore built an empire with investments in London, Dubai, South Africa, Philippines, Thailand, Singapore, Malaysia, Sri Lanka, British Virgin Islands, France, Switzerland, Greece, Spain and the United States. According to the CBI, the huge wealth build up is said to have taken place when Chidambaram was finance minister and home minister during UPA’s term at the Centre.

Karti has claimed Advantage does not belong to him, but Gurumurthy says he has handed over papers to the CBI that suggest Karti may be the real owner of the company, despite having transferred it to a close frontman in 2011.

Going by the documents, Karti owned nearly two-thirds of Advantage through a company called Ausbridge Holdings between 2006 and May 2011, but after that the ownership of Ausbridge was shifted to Mohanan Rajesh, Karti’s friend, who the CBI sees as his benami frontman.

Since 2011, Advantage Strategic India shares are held by four alleged benamdars, CBN Reddy, Padma Vishwanathan, Ravi Vishwanathan and one Bhaskararaman. Padma Vishwanathan is a director on Advantage’s board.

The CBI must prove that money paid to Advantage by INX Media was a quid pro quo for the former finance minister’s clearance of foreign investment in INX, and for help with tax fraud cases. A senior official of the CBI said Karti’s interactions with INX were confirmed by Mukerjea and his wife, Indrani, both in separate jails in Mumbai as accused in the murder of their daughter, Sheena Bora.

Now, Peter and Indrani’s testimonies would be crucial; they will have to confirm they paid the money. If that happens, the case will be sealed. A website, www.gurus.com, said in a report that Indrani has already confessed to the CBI about payments made to Karti.

But the CBI has not said anything on record. So, as of now, it’s only circumstantial proof that INX got FIPB clearance when Chidambaram was finance minister. And then, in turn, INX paid Advantage, with Advantage mysteriously changing hands to four other people. And then, wills made by these four parties surface to show that they will leave the property to Karti’s daughter.

The FIR filed by the CBI says Karti had brokered for Indrani and Peter-owned INX for issue of foreign investment permits by his father’s ministry, for which payments were made by INX to Advantage. If Karti is proved to own Advantage indirectly, he will face jail, perhaps accompanied by his father too in view of the alleged bribe payments by INX.

The CBI’s FIR names Karti, his companies Chess Management and Advantage, Padma Vishwanathan, and Peter and Indrani Mukerjea for violations of the Prevention of Money Laundering Act and FEMA.

The Chidambarams have repeatedly said their family has nothing to do with the exposed companies and are “political victims”. But the CBI and ED are not convinced. And it is here that things could become difficult for the top Congress leader. His involvement, direct or indirect, in the cases can come under investigation post the arrest of his son.

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