The CBI on Tuesday raided the residences of former Finance Minister P. Chidambaram and his son Karti in Chennai, Delhi and various other places alleging he could have benefited to the tune of Rs 3.5 crore for helping in the clearance of an FIPB proposal of media company INX Ltd when his father was at the helm in the North Block.
The raids that began at 6 a.m. and continued till 1.30 p.m. took place after the Central Bureau of Investigation agency filed an FIR alleging that Karti's invoices for approximately Rs 3.5 crore were raised in favour of INX group in the name of other companies in which he was having "sustainable interests" either directly or indirectly.
The raids were conducted at their residence in Nungambakam in Chennai and hometown Karaikudi in Tamil Nadu.
The FIR does not mention the name of Chidambaram, though it states that he had cleared the Foreign Investment Promotion Board (FIPB) approval for Rs 4.62 crore Foreign Direct Investment (FDI) in the FIPB meeting on May 18, 2007.
Both Chidambaram and his son denied there was any misconduct on their part and said the whole action was aimed at "muzzling" the voice of Chidambaram senior, who has been writing against the NDA government.
Karti said he had committed no crime and the case against him was foisted on account of political vendetta.
Chidambaram said FIPB clearance is given in hundreds of cases and there is no allegation against officials, who are members of the FIPB, or against him.
Besides Karti, those named in the FIR include INX Director Indrani Mukherjea and her husband Peter Mukherjea, both accused in the Sheena Bora murder case, and some unknown officials of the ministry.
However, the CBI said it found that INX made a downstream investment to the extent of 26 per cent in capital without the specific approval of FIPB, which included indirect foreign investment by the same foreign investors and generated more than Rs 305 crore.
The FIPB unit in the ministry had clearly stated that for downstream investment in INX, a separate FIPB approval was required.
Following a complaint filed in this matter and the FIPB seeking clarifications from it, the company entered into a criminal conspiracy with Karti, Promoter Director of Chennai-based Chess Management Services Pvt Ltd, so as to get issues resolved/addressed amicably by influencing the public servants of the FIPB unit by virtue of his relationship with the then Finance Minister, the FIR alleged.
The FIR also claimed that the INX group in its record has clearly mentioned the purpose of payment of Rs 10 lakh to Advantage Strategic Consulting (P) as towards "Management consultancy charges towards FIPB notification and clarification".
Separate CBI teams conducted searches at more than ten places in Tamil Nadu, besides carrying out over a dozen raids in Delhi, Mumbai and Haryana's Gurugram, including the residences of those persons mentioned in the FIR.
In Gurugram, CBI raided the office of Chess Management Services Private Limited, located in JMD Mehapolis business center on Sohna road in sector 48.
The CBI has registered the case under offences of criminal conspiracy, cheating, taking gratification by corrupt or illegal means, influencing public servants and criminal misconduct.
It said that the concerned officials of the FIPB by virtue of the influence exercised over them by Karti, not only ignored the serious illegality on the part of INX but also deliberately embarked on showing undue favours to the company.
"Such deceitful and fallacious proposal was favourably considered by the Finance Ministry officials and approved by the then Finance Minister," the agency said in the FIR.
After the raid at his residence, Karti was seen getting into a vehicle along with CBI officials, who then took him to his office also located in Nungambakkam.
At the end of the raids, which lasted for over seven hours, Karti told mediapersons that "they have not found anything at my residence and they have found nothing against me. It is politically motivated act."
"They have taken this action to malign my father's name."
"I will give a detailed statement later," Karti said before being driven out of his residence.
At his office, the CBI reportedly seized some documents.