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The CBI today searched the homes and offices of former finance minister P Chidambaram's son Karti across four cities for allegedly receiving money from a media firm owned by Indrani and Peter Mukerjea to scuttle a tax probe, a charge denied by him.
CBI sleuths fanned out across 14 locations including the Chidambarams' properties in Chennai, Mumbai, Delhi and Gurgaon early in the morning.
The investigating agency had filed an FIR yesterday against Karti, Indrani and Peter Mukerjea last evening on charges of criminal conspiracy, cheating, receiving illegal gratification, influencing public servants and criminal misconduct.
The agency did not rule out investigating the alleged role of P Chidambaram.
In an unusual move, the agency pitted its Joint Director (Anti Corruption) Vineet Vinayak to brief and face the queries of the media on the politically-sensitive case.
When asked if the former Union finance minister is under the probe of the agency, the 1995-batch IPS officer said, "We have set the process of investigation in motion with the FIR. All the issues relevant to this FIPB approval will be investigated."
"All the people whose involvement has come forth will be examined in due course," he added.
He said the agency is at the initial stages of investigation.
Giving details of the searches, Vinayak said the agency has recovered mails, hard disks which need to be examined. He also clarified that the searches took place only at the residence of Karti.
It is alleged that Karti received money from INX Media for using his influence to manipulate a tax probe against it in a case of violation of Foreign Investment Promotion Board (FIPB) conditions to receive investment from Mauritius.
The CBI has also recovered vouchers of Rs 10 lakh which were allegedly paid for the services. These vouchers were issued in favour of Advantage Strategic Consulting (P) Limited, a firm "indirectly" owned by Karti, Vinayak alleged.
He added that invoices of Rs 3.50 crore have also been recovered by the agency.
Talking to reporters in Chennai late in the evening, Karti said he "has never interceded on anybody's behalf to the government of India".
"This is a completely bogus and fabricated charge. I am being harassed politically. I will face this politically," Karti said.
His father issued a strong statement in response to the raids saying that the government was using the CBI and other agencies to target his son.
FIPB approval was granted in "hundreds of cases", the senior Congress leader said.
"The government, using the CBI and other agencies, is targeting my son and his friends... The government's aim is to silence my voice and stop me from writing, as it has tried to do in the cases of leaders of opposition parties, journalists, columnists, NGOs and civil society organisations," he said.
He asserted that he would continue to speak and write.
The five secretaries who constitute the FIPB, the officials of the FIPB secretariat and the competent authority in each case are public officials, Chidambaram said, adding that there was no allegation against any of them.
"There is no allegation against me," he added.
Every case was processed according to law and approval was granted or refused in accordance with the recommendations of the FIBP, he maintained.
According to the CBI, INX Media clearly states in its records that Rs 10 lakh was given to Advantage Strategic Consulting (P) Limited 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 (currently in jail on charges of murder their daughter Sheena Bora), 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.
Ironically, though the FIR names Karti and claims that he exerted his influence on finance ministry officials, it does not identify the officials of either the FIPB or the ministry or list them as accused.
The CBI searched Chidambaram's home in Nugambakkam in Chennai where Karti also stays.
It also carried out searches at the house of former media baron Peter Mukerjea in the posh Worli area in south Mumbai, sources said.
INX Media was seeking investment from Mauritius, an official explained. The investment was allowed by the FIPB board and the finance minister with the condition that only Rs 4.62 crore could be received; 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, the agency alleged.
It said officials, by virtue of the influence exercised over them by Karti, not only 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.
The officials of the FIPB unit ignored the request of the revenue department to investigate how the investment was made by the company without FIPB approval.
The company, on the advice of FIPB officials, filed a fresh request which was cleared by the finance ministry and the finance minister.
"Such deceitful and fallacious proposal was favourably considered by the officials of Finance Ministry and approved by the then Finance Minister," it alleged.
"By such partisan and mala fide acts done pursuant to the criminal conspiracy with the beneficiary company and the intermediaries, the senior officials of the Finance Ministry not only granted the illegal approval but also misinformed the investigation... By Income Tax department," it said.