Paid Karti $700,000 through foreign subsidiaries, claim Indrani and Peter

Continuing its probe into the INX Media case, CBI produced Karti before Delhi's Patiala House Court'

Delhi's Patiala House Court on Wednesday sent Karti Chidambaram to one-day police custody after Central Bureau of Investigation (CBI) claimed his custodial interrogation was needed to unearth the conspiracy on the basis of confessional statements of INX Media Limited directors Peter and Indrani Mukerjea.

The Mukerjeas, alleged that they paid $700,000 to Karti on the instructions of his father, former Finance Minister P Chidambaram, as quid pro quo for an FIPB clearance, officials said.

The statements of the Mukerjeas were recorded by the Enforcement Directorate (ED), which is probing the money laundering angle in the case, while the CBI had only recorded Indrani's statement before a magistrate as per section 164 of the CrPC, they said.

Earlier in the day, CBI sought a 15-day judicial custody after producing Karti before Metropolitan Magistrate Sumeet Anand.

His father, former Finance Minister P Chidambaram, was not available for comments. However, he had earlier denied the involvement of his son in any case.

Senior Congress leader and advocate Abhishekh Manu Singhvi, who is representing Karti in court, on Wednesday raised question over his 'sudden arrest', at a time when the Centre is facing flak over the PNB scam involving businessman Nirav Modi.

Karti was detained at the Chennai Airport on Wednesday and after the necessary formalities were completed, he was put on a domestic flight to the national capital.

The case relates to the approval given by the Foreign Investment Promotion Board (FIPB) for the receipt of funds by INX Media which took place while Karti's father, P Chidambaram, was the Union finance minister. CBI has alleged that the Foreign Exchange Management Act (Fema) was violated. The Chidambarams, however, have denied all charges made against them. 

The Congress has called Karti's arrest a "vendetta" and a "diversionary tactic". The BJP, for its part, has said that this is the law.  

Here are the top 10 developments around Karti Chidambaram and the INX Media case:  

1) CBI gets one-day custody: Karti Chidambaram, arrested in connection with the INX Media case, was on Wednesday sent to one-day CBI custody by a Delhi court after the agency claimed his custodial interrogation was needed to unearth the conspiracy over alleged payment of $1 million bribe to him by the media company through foreign entities.

Karti was arrested on the basis of confessional statements of INX Media Limited directors Peter and Indrani Mukerjea, alleging that they paid $700,000 to him on the instructions of his father P ChidaChidambaramquid pro quo for a FIPB clearance, officials said.

The statements of the Mukerjeas were recorded by the Enforcement Directorate (ED), which is probing the money laundering angle in the case, while the CBI had only recorded Indrani's statement before a magistrate as per section 164 of the CrPC, they said.

In the statement under this section, which is like a confessional statement before a judicial magistrate, Indrani has stated that she and her husband Peter Mukerjea had acceded to Karti's demand of one million dollars for allegedly fixing the violations done in the FIPB clearance.

Indrani, they said, had confirmed in her statement to the CBI and ED that a payment of $700,000 was made to the bank accounts of overseas firms linked to Karti.

During the proceedings, CBI prosecutor V K Sharma told the court that "Indrani's statement under section 164 CrPC was recorded before a magistrate on February 17 in which she told the magistrate that in a meeting at a five-star hotel here, she and Peter met Karti and he demanded $1 million."

"The money was later paid by Peter on behalf of INX Media through off-shore entities and it is being investigated," the CBI claimed, adding "this was done to fix the violations done in FIPB clearance".

The prosecutor said Karti was needed to be quizzed to unearth the "total conspiracy" and claimed he was not cooperating in the probe and was repeatedly travelling abroad which "confirmed apprehensions" that "he will flee" from India.

The CBI earlier in remand application on Wednesday asked for 15-day custody of Karti Chidambaram.

2) Karti Chidambaram produced before Patiala House Court: Karti Chidambaram on Wednesday was produced before Delhi's Patiala House Court, after being flown to the capital from  Chennai, where the CBI had arrested him.

Karti was produced before Metropolitan Magistrate Sumeet Anand who allowed the request of his lawyers to have an interaction with the accused inside the court room.
 

The court allowed Karti and his lawyers to interact for 10 minutes, after which the proceedings resumed.

3) Congress leader Abhishek Manu Singhvi to represent Karti: Congress leader and senior advocate appeared for Karti Chidambaram.

Singhvi on Wednesday raised question over the 'sudden arrest' of the former Union Finance Minister P Chidambaram's son Karti Chidambaram.

Singhvi, who represented Karti in court in the INX media case, pointed out that his arrest has come at a time when the Centre is facing flak over the PNB scam involving businessman Nirav Modi.

According to ANI, Singhvi said the arrest is motivated and there hasn't been given a single summon in past 6 months.

4) P Chidambaram's premonition of Karti's arrest: Senior Congress leader P Chidambaram appeared to have a premonition of the arrest of his son Karti when he filed a petition recently in the Supreme Court apprehending “continued harassment” to him and his family members.

Chidambaram, who has been closely monitoring the case of his son in the Supreme Court which is argued by his party colleague and senior advocate Kapil Sibal, had sprung a surprise last week by filing a petition on his own accusing the CBI and the Enforcement Directorate (ED) of carrying out a political vendetta against him and his family.

In his petition, Chidambaram has sought the apex court’s direction prohibiting the CBI and ED from continuing their “illegal investigations” and from acting in any manner “causing repeated harassment” to him and his family members, including his son.

5)Karti's CA moves bail plea: Karti Chidambaram's chartered accountant S Bhaskararaman, arrested in the INX Media money laundering case, has moved a plea seeking bail before a Delhi court, which is likely to hear it on Thursday.

The application filed by Bhaskararaman, who is presently in judicial custody, was filed before Special Judge Sunil Rana, seeking bail on the ground that he was not required for custodial interrogation and no purpose would be served by keeping him in custody.

The CA was sent to jail on February 26 on expiry of his custodial interrogation by the Enforcement Directorate (ED), which had arrested him on February 16 from a five-star hotel in the heart of the national capital.

6) CBI to use Indrani Mukerjea's confession: CBI sources told news agencies that the probe agency will inform the court about Indrani Mukerjea's alleged confession that in 2007, the Mukerjea couple took help of Chess Management Service once their application for FIPB clearance of Rs 3.05 billion (Rs 305 crore) was rejected. The sources added that the FIPB allowed only Rs 50 million (Rs 5 crore) clearance.   

The CBI sources added that once Chess Management was hired and rules were made for Karti's 'services'. Further, Karti's management company was paid Rs 1 million (Rs 10 lakh). This, according to the sources, would be the focus of the remand application.    

7) BJP says this is law, not a vendetta: Reacting to Karti Chidambaram being taken into CBI custody, BJP’s Sambit Patra said this was about the law, and not vendetta. "I believe no one should consider oneself above the law of country. If corrupt are being jailed and law is taking its own course, I see no reason why any political party should cry vendetta," Patra said.    

8) 'Congress won't be deterred': Reacting to Karti Chidambaram being taken into custody by the CBI, Congress leader Randeep Surjewala said the party would not be deterred by unleashing of a vendetta against P Chidambaram and his family. "We will continue to bring out the truth," Surjewala added.

Senior lawyer Prashant Bhushan said while the CBI might have evidence against Karti, there was "no justification" to arrest him during investigation, without a chargesheet being filed, as there was no danger he would flee the country. 

9) Karti was under ED scanner, too: On February 23, it was reported that the Supreme Court refused to interfere with the summons issued by the ED against Karti in the INX Media case. The apex court had asked him to appear before it on March 1.   

Refusing to interfere with the ED's summons, the Bench of Chief Justice Dipak Misra, Justice Amitava Roy, and Justice D Y Chandrachud had, however, adjourned the hearing until March 6. The Bench had permitted Karti to make a representation to the ED seeking more time to appear before it. 

Earlier, Karti had been questioned by the ED, which had summoned him on February 2, after which he had informed the agency that he would be unable to depose as he had an interlocutory application pending in the Supreme Court in this case, says reports. 

10) Raids and hours of grilling: On February 16, it was reported that the ED carried out fresh searches against people allegedly linked to Karti in connection with the INX Media case.

Officials had told news agencies that the raids were conducted at three premises in Chennai under provisions of the Prevention of Money Laundering Act (PMLA), the anti-money laundering law. The officials added that the searches were carried out against people allegedly linked to Karti.

On February 15, the ED had questioned Karti for over 10 hours in Delhi. 

The CBI and ED cases: The CBI had filed an FIR on May 15 last year, alleging irregularities in the FIPB clearance to INX Media for receiving funds from abroad to the tune of Rs 3.05 billion (Rs 305 crore) in 2007, when senior Chidambaram was the Union finance minister.   

It is alleged that Karti received funds to the tune of Rs 1 million (Rs 10 lakh) in the case, they said.

The CBI is also probing the alleged irregularities in grant of FIPB clearance to the Aircel-Maxis deal in 2006. 

The ED had registered a money laundering case against Karti and others in May of 2017. It registered an Enforcement Case Information Report (ECIR), the probe agency's equivalent of a police FIR, against the accused who were also named in a CBI complaint, including Karti, INX Media, and its directors -- Peter and Indrani Mukerjea. 

The ECIR was lodged under the provisions of the Prevention of Money Laundering Act. The central probe agency has been probing the alleged "proceeds of crime" generated in this case. 

It was the ED that had provided information about the alleged illegal payments made by INX Media, based on which the CBI had filed its FIR.

The ED has alleged that INX Media, deliberately and in violation of the conditions of the approval, made a downstream investment of 26 per cent in the capital of INX News Pvt Ltd without specific approval of FIPB. This included indirect foreign investment by some foreign investors. This generated Rs 3.05 billion (Rs 305 crore) foreign direct investment in INX Media Pvt Ltd against the approved foreign inflow of Rs 46.2 million (Rs 4.62 crore).

The ED further alleged that INX Media entered into a criminal conspiracy with Karti to wriggle out of the situation without any punitive action.  

Moreover, the agency alleged that the finance ministry's FIPB unit had not only granted an illegal approval but also misinformed the Income Tax Department's investigation wing.     

With agency inputs