Govt cracks down on Oppn leaders: after Lalu, Chidambaram & son raided

अरे पढ़े-लिखे अनपढो,ये तो बताओ कौन से 22 ठिकानों पर छापेमारी हुई।BJP समर्थित मीडिया और उसके सहयोगी घटको (सरकारी तोतों) से लालू नही डरता।

— Lalu Prasad Yadav (@laluprasadrjd) May 16, 2017

RSS-BJP को लालू के नाम से कंपकंपी छूटती है। इनको पता है कि लालू इनके झूठ,लूट और जुमलों के कारोबार को ध्वस्त कर रहा है तो दबाव बनाओ।

— Lalu Prasad Yadav (@laluprasadrjd) May 16, 2017

Meanwhile, Chidambaram and his son remained in news through the day. The CBI said it would look into other FIPB clearances granted during the senior Chidambaram's term as Union Finance Minister.

Sources said the Enforcement Directorate (ED) is preparing to register a fresh case under the stringent Prevention of Money Laundering Act.

The raids

On Tuesday morning, the CBI booked Chidambaram's son Karti P Chidambaram, Sheena Bora murder accused media baron Peter Mukerjea and wife Indrani Mukerjea, the former owners of the INX Media and INX News, and unnamed Finance Ministry officials on charges of criminal conspiracy and cheating, among others.

Simultaneously, 16 premises in Chennai, Delhi, Mumbai, Gurugram and other cities were raided by the agency. The raids also targeted the residence of the former Union Minister.

At time of writing this report, the raids were still on at the offices of Chess Management Services, a company where Karti Chidambaram is a director.

Vineet Vinayak, Joint Director of the CBI, in a press briefing, said that the agency seized documents and hard drives during the course of searches. The CBI official said the investigations were in the preliminary stages, and everybody related to the investigations will be examined in due course, suggesting that the former minister may be interrogated by the agency.

P Chidambaram, meanwhile, did not speak to the media outside the Bengaluru High Court, he released a statement calling the raids an attempt to silence him. "The government, using the CBI and other agencies, is targeting my son and his friends,” he said in the statement.

Karti Chidambaram, too, told the media that the investigating agencies have no proof against him, and were just targeting him to stifle his father’s voice.

Political reactions

Several leaders of the Congress party, including general secretary Digvijaya Singh and spokesperson Randeep Surjewala, jumped to their colleague's defence, saying the former minister will not be cowed down by such acts.

Union Cabinet Minister and senior BJP leader Ananth Kumar, meanwhile, reacting to Chidambaram's allegations of vendetta, said, “Only black money and corruption is being targeted.”

What led to the raids

ED had registered a case against INX Media for suspected FEMA violations in 2010. The case was initiated when it was found that foreign entities based out of Mauritius bought INX shares at Rs 862.31 apiece, which was 86.2 times more than the face value.

The agency reportedly claimed that the FDI received by INX Media was invested in stepdown subsidiaries without approval of the FIPB. The ED is learnt to have come across these violations while it was investigating the financial dealings of corporate lobbyist Niira Radia.

The ED, which is probing FIPB approval in the Aircel-Maxis deal, in which Karti Chidambaram's name has cropped up, is learnt to have come across the role of Karti-linked firms in the FIPB approval granted to the INX Media and INX News, last year.

INX media group companies were also subjected to an inquiry by the Serious Fraud Investigations Office of the Ministry of Corporate Affairs on its shareholding pattern.

Insiders also say that both the agencies had seen renewed coordination since Alok Verma took over as Director of the CBI.

Sequence of events

The FIR filed by the CBI details the entire sequence of events.

INX Media P Limited approached the chairman of the FIPB, seeking approval for permission to issue, by way of a preferential allotment, in one or more tranches, redeemable preference shares of Rs 10 each collectively representing approximately 46.215% of the issued Equity Share Capital of INX Media to three non-resident investors – Dunearn Investment (Mauritius) Pte Ltd, NSR PE Mauritius LLC and New Vernon Pvt Equity Ltd – through the FDI route.

The CBI, in the FIR, notes how the company had also mentioned about its intention, subject to provisions of applicable laws, to make a downstream financial investment to the extent of 26% of the issued and outstanding equity share capital of M/s INX News P Ltd.

The CBI claims that the FIPB unit had clearly mentioned the inflow of FDI to the extent of Rs 4,62,16,000 (Rs 4.62 crore), and made it clear that for downstream investment in INX News, a separate FIPB approval will be required.

In the subsequent meeting, the FIPB recommended the proposal of INX Media for consideration and approval of then-Finance Minister P Chidambaram. It, however, didn't approve the downstream investment by INX Media in INX News.

However, this is when the violations happened.

“Contrary to the approval of FIPB conveyed through letter dated May 31, 2007 and condition mentioned therein, INX Media deliberately and in violation of the conditions of the approval made a downstream investment to the extent of 26% in INX News without the specific approval of FIPB which included indirect foreign investment by the same foreign investors and generate more than Rs 305 crores FDI in INX Media against the approval foreign inflow of Rs 4.62 crores by issuing the shares to the foreign investors at a premium of more than Rs 800 per share,” the CBI says in its FIR.

The FIR states that after receipt of a complaint, the IT department, in February 2008, sought clarifications from the FIPB unit.

In turn, when when FIPB sought clarifications from INX Media, “in order to wriggle out of the situation without any punitive action, entered into a criminal conspiracy with Karti Chidambaram, son of then Finance Minister P Chidambaram, and Promoter Director of Chess Management Services, so as to get the issues resolved amicably by influencing the public servants of the FIPB unit of ministry of finance by virtue of his relationship with the then Finance Minister”.

After the interaction with Chess Management, INX Media tried to justify its actions, by way of clarifications suggested by Chess Management. The excess foreign inflow received, for example, was justified as premium received against the shares issued.

The CBI claims that the officials of the FIPB unit, under pressure from influence exercised by Karti Chidambaram, “not only ignored the serious illegality on the part of INX Media on both the counts but also deliberately embarked on showing undue favour to INX Group by abusing their official position and advised the company to apply fresh for FIPB approval in respect of the downstream investment which had already been made by INX Media”.