Author: Bhumi Kamble
A Student at DR. D.Y. Patil College of law, Navi Mumbai
INTRODUCTION
A media-related organisation was founded in 2006 by Peter Mukherjea and his second wife, Indrani Mukerjea. Of course, this needed a significant amount of finance, which they could not have afforded on their own. Therefore, if money might be raised by the foreign corporations investing in their company, the Foreign Direct Investment (FDI) option was chosen. ‘INX Media’ is the firm name here. The creators of this media firm had to adhere to the international Investment Promotion Board’s (FIPB) authorised method, which required them to get government approval before obtaining money from international corporations.
The INX Media case concerns claim of anomalies in the foreign exchange approvals granted to INX Media group in 2007 so that the company may accept foreign investment.
There is also another, so-called automatic, path that does not require authorization at all; but, for security reasons, foreign direct investment (FDI) in the banking, media, and defence sectors requires government clearance. The government-appointed “Foreign Investment Promotion Board” is the body that will provide this authorization. Prior to being moved to the Department of Economic Affairs inside the Ministry of Finance in 2003, FIPB was established under the PMO following liberalisation. Presently, FIPB was superseded in 2017.
The federal finance minister at the time was P. Chidambaram. The investigating authorities have connected him to his son Karti Chidambaram.
P. Chidambaram was not the subject of any charges as of September 2019. It is said that the CBI is looking into this. After being held in Tihar Jail for 105 days, Chidambaram was granted bail on December 4, 2019.
DETAILS OF SCAM
INX Media reportedly broke foreign investment restrictions when it was created by media entrepreneurs Indrani and her husband Peter Mukerjea. Although INX Media was authorised to obtain foreign capital up to ₹4.62 crore, it is said that the company has received cash totalling ₹305 crore.
INX Media requested approval for three non-resident investors located in Mauritius to make foreign direct investments (FDI) in March 2007 from the chairman of the Foreign Investment Promotion Board (FIPB). Under the INX Media brand, this funding was sought to launch and run many television networks. According to the statement given to the authorities of FIPB the company requested for total investment of 26 percent of their share capital which consisted of their issued and outstanding capital.
Although the downstream investment was not allowed by the FIPB, the request for FDI inflow was granted. The inflow should not exceed 46.20 percent of INX media’s ownership. However, the CBI claims that the downstream investment was carried out by the corporation deliberately and in violations of the conditions and approval. It also issued shares to foreign investors totalling of Rs. 305 crores at premium which was more than Rs. 800 on each share issued
The founders’ 26% downstream investment in their other firm, 9X News, which was banned by the FIPB during the granting of approval favouring FDI, was another breach of the FIPB law.
In response, the pair came up with a different plan to get around the accusation. They got in touch with Karti Chidambaram, the director of Chess Management Service Limited, and got INX Media to hire this company’s consulting services. Notwithstanding this, P Chidambaram, the Union Finance Minister at the time, was the father of Karti Chidambaram. This was done to enter the political party’s inner circle, quell the serious accusation, and win support across the country for the accusations that the investigating body had handed down. It should be mentioned that the couple selected these two individuals due to their influential positions and the fact that FIPB was then a part of the Ministry of Finance.
Karti Chidambaram’s identity was therefore concealed over time by transferring a total of Rs. 10 lakhs to the account of a different business called “Advantage Strategic Consultant Limited.”
The pair was then requested to submit a new proposal for the downstream investment, which was accepted this time after it had previously been turned down by the FIPB. Eventually, the FIPB further declined to issue an order to continue the inquiry into the prior money laundering of 305 Crore rupees. FIPB accomplished this by following Finance Minister P Chidambaram’s directives.
A crucial issue to keep in mind in this situation is that although this plan was approved for the downstream investment, it was done so retroactively. They should have been punished for their prior violations when they did not have approval for the downstream investment, but nothing of the kind happened. In this case, the Finance Ministry representatives disregarded the Revenue Department’s request for an investigation in addition to continuing to provide INX Media unfair advantages. The people in these positions gravely abused their authority in this deed.
INVESTIGATION
The couple’s problems eventually subsided, at least temporarily. However, May 2017 saw the approaching of another significant moment in the year when the Enforcement Directorate brought a money laundering case against Karti Chidambaram, INX Media, and their directors. Following that, Karti Chidambaram was also the target of a case brought by the CBI. Karti Chidambaram was questioned many times by the two authorities after they conducted multiple searches on the Chidambaram family’s homes and offices.
The authorities were concerned that Karti Chidambaram would try to shut his international bank accounts, where they believed he had stashed their money, so they also issued a lookout order, which notifies airports to prevent a passenger from flying overseas.
The Indian Penal Code’s Sections 120-B and 420, as well as Sections 8, 13(2), and 13(1) of the Prevention of Corruption Act, 1988, were all recorded by the CBI against the accused.
The CBI detained Karti Chidambaram at the Chennai airport in January 2018 and brought him to Delhi. For five days, he was detained by the CBI. Karti was placed under judicial detention for a period of 12 days, ending on March 24. However, on March 23, Karti Chidambaram was granted bail by the High Court. P Chidambaram begged for anticipatory release from the High Court several times since he thought he may be arrested because of all of this, but the Apex court denied his request, stating that the pre-arrest parole would interfere with the inquiry.
P Chidambaram was detained by the CBI on August 21, 2019, and as a result, he was placed in judicial detention till September 19. Following extensive questioning while he was being held in detention, he was given bail.
ANALYSIS MADE MY DELHI HIGH COURT
The Delhi High Court has issued an order requiring the production of all records and the accused parties from their previous trial before the trial court. The CBI responded by stating that it is not possible to make a claim for papers that have not been submitted. In this case, the CBI contends that the prosecution bears the burden of proving the allegations made against the accused, and that the accused is required to keep mute on the prosecution’s presented materials. Following his arrest, Karti Chidambaram requested bail. The High Court granted him temporary release, subject to several conditions, including the seizure of his passport and an inability to leave the country.
Given that a FIR was filed in Delhi and Karti Chidambaram lived in Chennai, he brought up the issue of where the trial will take place. His new plea, which contested the Enforcement Directorate’s summons, was accepted by the Supreme Court. Karti Chidambaram assumed the Enforcement Directorate would contest the High Court’s temporary relief, therefore he had previously sent a caution to the Supreme Court. As Indrani Mukerjea gave testimonies to the CBI about bribing Karti, the court questioned her and ordered her to appear before the magistrate so that her testimony could be recorded.
FURTHER INSIGHTS
Despite efforts to reveal the truth by the investigative body and Finance Minister P Chidambaram, the father and son of a politician have been charged with money laundering. Due to their participation in Parliament—one in the Rajya Sabha and the other in the Lok Sabha—they were able to avoid accusations. They have evidence, but the opposition does not question their escape routes. Despite the CBI’s best efforts to make the offences public, the court must render a fair decision. The 2008 lawsuit has not yet been concluded.
The opposition does not question the father and son’s escape plans, even though they are in detention and are reportedly involved in money laundering. The crimes have been made public by the CBI, but no sanctions have been announced.
CURRENT SCENARIO
P and Karti Chidambaram were called by the Delhi High Court in April 2021, but they were excused from appearing because, according to their attorney’s appeal, they were participating in the election campaign in Tamil Nadu. Judge Suresh Kumar Kait asked for answers on the CBI’s request contesting the trial court’s order to submit the accused’s documents, and the court postponed the case until May 2021.
CONCLUSION
Due to the election and epidemic, the Delhi High Court is postponing cases, which is creating a national emergency and slowing down the economy. As charged members of Congress, justice will be served, and the guilty will eventually be held accountable.
FAQ’s
Who were the founders of INX Media?
Indrani Mukerjea and her husband Peter Mukerjea established INX News Pvt. Ltd. and INX Media Pvt. Ltd. Peter Mukerjea was nominated chairman of INX Media and Indrani Mukerjea made herself CEO of her own firm. Indrani Mukerjea also selected Peter as Chief Strategy Officer (CSO).
What allegations were imposed on the owners of INX Media?
Allegations against INX included breaking the standards for approval established by the FIPB. Even after the FIPB’s restriction and rejection, INX brought around Rs305 crore (US$43 million) and made downstream investments up to 26%.
Why did CBI file case on the approval given by FIPB and owners?
The Mukerjea family laundered around Rs. 275.5 crore into INX’s eight subsidiary firms between 2007 and 2008, using Mauritius, an East African country, according to studies done by the Central Board of Direct Taxes and INX’s previous taxes.
