ED widens probe against P Chidambaram, more FIPB approvals, shell firms under lens

The ED's money laundering probe against former finance minister P Chidambaram has been enlarged as it suspects his role in granting alleged illegal FIPB clearances to at least four more business deals, apart from INX Media and Aircel-Maxis, and receiving multi-crore kickbacks through multiple shell firms, official sources said on Wednesday.

The federal agency has also come across evidence where alleged illegal deposits of over Rs 300 crore were made in a single shell firm after purported kickbacks were received by Chidambaram and his son Karti Chidambaram in lieu of granting illegal Foreign Investment Promotion Board (FIPB) and Foreign Direct Investment (FDI) approvals.

The agency, sources said, has requested the court to allow it custodial interrogation of the father-son duo given the nature of these complex transactions and kickback deals which have cross-border ramifications.

The sources said the Enforcement Directorate (ED) is probing the former finance minister's role in grating alleged illegal FIPB approvals in at least four cases involving Diageo Scotland Ltd, Katara Holdings, Essar Steel Ltd and Elforge Ltd. The FIPB that used to function under the Union finance ministry has now been scrapped.

The senior Congress leader is already under probe by the agency under the Prevention of Money Laundering Act (PMLA) for grant of FIPB approval, in an alleged illegal manner, to two others deals -- Aircel-Maxis and INX Media.

The Delhi High Court on Tuesday cancelled the anticipatory bail given to Chidambaram in the INX Media money laundering and corruption case.

The agency, apart from the CBI, is seeking to interrogate Chidambaram in the INX Media deal case, in which it had registered a case under the Prevention of Money Laundering Act (PMLA) in 2017.

The ED has found, the sources said, that Chidambaram and Karti are "beneficial owners" of several shell firms that have been incorporated both in India and abroad.

The shell firms were used to receive bribes from the illegal FIPB clearances given by Chidambaram during his tenure as the Union finance minister in alleged connivance with Karti and in one of such companies, deposits of over Rs 300 crore were made.

The agency's probe found that the alleged kickbacks so received by the father-son duo in shell firms were used to meet their "personal expenses", opening and depositing money in over two dozen foreign accounts and purchase of multiple immovable assets in countries such as Malaysia, United Kingdom, Spain among others.

It has been detected that a shell firm linked to Karti had got "huge payments" from a British Virgin Islands (BVI)-based firm that also figured in the global data leaks of foreign share holding of various entities,also known as the Panama Papers.

The sources said the ED has evidence showing that the shareholders and directors of one of the main shell firms also made a will for transfer of the entire shareholding of that company to the granddaughter of Chidambaram and the daughter of Karti.

The ED, they said, has seized several "incriminating documents, emails and hardware" after raids were conducted against the two but they have not cooperated with the investigators to unravel their contents as it will lead to the unearthing of multiple foreign bank accounts and assets in a number of countries which has links to the former Union minister and his family.

They feel that as both the father-son enjoyed anticipatory bail provisions in the INX Media and Aircel-Maxis cases since early 2018, the investigation and evidence collection has been delayed and the ED as well as the CBI have not been able to complete the probe.

As the information is only known to the two and they "deliberately withhold" a lot of information, the probe agencies have been forced to undertake a time-consuming process of collection of vital information and data after getting issued Letters Rogatory (court issued legal request to foreign jurisdictions) to a number of countries across the globe, they said.

The two agencies are also looking at filing their first charge sheets in the INX Media money laundering case while in the Aircel-Maxis case, the agencies have filed their respective prosecution complaints.

The ED had last year attached Rs 54 crore worth of assets of Karti that are located in India, UK and Spain in connection with the INX Media case.