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INX Media 'kickback' money trail may lead investigators to Singapore, Spain

Singapore subsidiary of firm that allegedly received kickbacks likely to be under ED scanner

Sai Manish  |  New Delhi 

Chidambaram CBI raid
CBI raid at former Union Minister P Chidambaram's residence in Chennai. Photo: ANI

The Central Bureau of Investigation (CBI) has in its First Information Report (FIR) naming Karti Chidambaram alleged that he received kickbacks for facilitiating a foreign investment proposal for in 2007. The has noted that money was received as consultancy fees by directly and indirectly linked to Karti Chidambaram.
 
One of the in question, Services Private Ltd, was run by Karti Chidambaram with a person named It is not clear whether Palaniappan was Karti Chidambaram’s blood relative. But documents show all shares of the company were held by “directors or relatives of directors”. Karti Chidambaram and Palaniappan, along with two others, were the first shareholders of when the company was incorporated in 1998. Both held 100 shares each at the time. By 2003, the number of shareholders in the company increased to 14. Karti Chidambaram, meanwhile, now held 2,499 shares in the company which was almost a quarter of the company’s shares. By 2004-05, the company was being completely owned and run by Karti Chidambaram and Palaniappan. Both held 5,000 shares each and were also directors in the company.

 
The has alleged in its FIR that it was through that tried to approach the Foreign Investment Promotion Board (FIPB) to ease rules for bringing in foreign investors. For its so-called services, the says, Karti Chidambaram’s company was allegedly paid Rs 10 lakh sometime after FIPB clearance to in 2007.
 
Company documents sourced by Business Standard from the (RoC) show that Karti Chidambaram resigned as a director of the company on March 4, 2013, almost six years after the alleged controversial role played by for Karti Chidambaram’s resignation letter reads: “I hereby tender my resignation as director of the company. I am unable to continue due to personal reasons. I place on record the cooperation extended to me by associates, clients and fellow directors. I wish the company all the best in its future endeavours.”
 
Subsequently Karti Chidambaram also seemed to have offloaded his shares in RoC documents show that most of Karti Chidambaram’s shares were transferred to Palaniappan. Another person, Nandini Palaniappan, came on board as a minority shareholder. Meanwhile, a Delhi-based resident replaced him as a director of the company.
 
Karti Chidambaram’s exit didn’t seem to have much impact on the company’s financial performance. Over the years the company was earning an average revenue of Rs 1.5 crore every year with losses adding up to a few lakhs of rupees. The company continued on the same revenue trajectory till 2016.
 
While the has named Karti Chidambaram representing as an accused, the FIR also names another company, Advantage Strategic Consulting Private Ltd, represented by as an accused. The reportedly claims the company received kickbacks to the tune of Rs 3.5 crore from While Karti Chidambaram is not directly linked to this company, has alleged and is probing any indirect nature of control exercised by him in Advantage Strategic Consulting. In addition to Vishvanathan, there were various other shareholders in the company. These included two other corporate entities – Private Limited and and Investments Private Limited. 
 
Advantage Strategic Consulting was a small company but saw an exponential rise in its profits after 2007. This is when, the alleges, the foreign investment deal was facilitated by and Rs 3.5 crore kickbacks were allegedly received by Advantage Strategic Consulting. Company documents show that in 2006 the income of Advantage Strategic Consulting was a little over Rs 16 lakh and the company made a loss of around Rs 12 lakh. In 2007, the company’s income jumped to Rs 2 crore and it made a profit of around Rs 36 lakh. The next year, the company’s financial performance was around the same mark. However, in 2010, its revenues jumped 10 times to over Rs 22 crore, while it showed a profit of almost Rs 17 crore. In 2011, the company’s revenues were again down to almost Rs 1.5 crore.
 
In 2011, Advantage Strategic Consulting also made payments totalling Rs 8.7 crore in foreign currency (Pound Sterling and Singapore Dollars). This money was paid as an “advance for shares” to its Singapore-based subsidiary, Advantage Strategic Consulting Singapore Pte Limited. In 2012, this Singapore-based company incorporated a subsidiary in Spain which was called Advantage Estrategia Esportion SL. In 2012, BJP leader Subramanian Swamy had alleged the Singapore-based company had a role to play in the Aircel-Maxis deal. Swamy had been sued for defamation by the company in the High Court of Singapore after he made these allegations.

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