CBI alleges illegal gratification in INX Media case
₹3.2 crore paid by it to four companies after Chidambaram cleared downstreaming of investments
20/10/2019 , Special Correspondent, NEW DELHI
P. Chidambaram after he was produced in court. file photo
The CBI has alleged that four invoices were raised for payment of over ₹3.2 crore by INX Media to four companies after its proposal for downstreaming investments into INX News was cleared by the then Union Finance Minister, P. Chidambaram, in 2008.
The companies are Advantage Strategic Consulting Private Ltd. (ASCPL), which is allegedly controlled by Karti Chidambaram, its Singapore wing, North Star Software Private Ltd. and the Greece-based Geben Trading Limited, the CBI said.
On March 13, 2007, the company applied for investments from three Mauritius-based firms — Dunearn Investments, New Silk Route and New Vernon Private Equity Ltd. — by way of preferential allotment of 14.99 lakh equity shares at ₹10 a unit.
However, as alleged, INX Media had entered into a deal with the investors for issuance of shares at a premium of ₹862.15 a unit. The quoted amount of the proposed influx was just ₹4.62 crore, but the real figure turned out to be ₹403.07 crore.
The proposal was put up before the FIPB (Foreign Investment Promotion Board), which recommended it, clarifying that a separate approval was needed for downstreaming. Mr. Chidambaram cleared it, but the approval letter did not quantify the FDI in monetary terms, allegedly to conceal the exact amount of influx. It was showed only as 46.2% of the issued equity share capital of the company to the investors, the CBI said.
In February 2008, the then Information and Broadcasting Minister received complaints about the source of funding to INX News from some media representatives. The matter was sent to the Department of Revenue (DoR). Some former MPs, besides former INX Media employee Vir Sanghvi, too approached the Finance Minister, who also referred the issue to the DoR.
The Income Tax Department initiated an inquiry and sought clarifications from the Finance Ministry’s FIPB unit on “excess” investment and 26% downstreaming in INX News. The FIPB unit officials, named in the CBI chargesheet filed on Friday, defended the decision on the FDI issue, the CBI said.
The agency alleged that correspondences between the Income-Tax Department, the FIPB unit and INX Media were on when then INX Media director Peter Mukerjea allegedly contacted Mr. Chidambaram to resolve the issues. On his instructions, it is alleged, the company directors met Mr. Karti Chidambaram at Hotel Hyatt in mid-2008.
At the meeting, a demand for $1 million was made, of which ₹9.96 lakh was paid in advance to ASCPL in the guise of consultancy, the CBI said.
As advised by Mr. Karti’s company Chess Management Services, INX Media replied to the FIPB unit's queries on the issues of “excess” investment and downstreaming. The official who received the response proposed to forward it to the Income Tax Department for further action. However, the accused FIPB officials buried the matter, saying that INX News had been told to apply afresh for downstreaming.
₹3.2 crore paid by it to four companies after Chidambaram cleared downstreaming of investments
20/10/2019 , Special Correspondent, NEW DELHI
P. Chidambaram after he was produced in court. file photo
The CBI has alleged that four invoices were raised for payment of over ₹3.2 crore by INX Media to four companies after its proposal for downstreaming investments into INX News was cleared by the then Union Finance Minister, P. Chidambaram, in 2008.
The companies are Advantage Strategic Consulting Private Ltd. (ASCPL), which is allegedly controlled by Karti Chidambaram, its Singapore wing, North Star Software Private Ltd. and the Greece-based Geben Trading Limited, the CBI said.
On March 13, 2007, the company applied for investments from three Mauritius-based firms — Dunearn Investments, New Silk Route and New Vernon Private Equity Ltd. — by way of preferential allotment of 14.99 lakh equity shares at ₹10 a unit.
However, as alleged, INX Media had entered into a deal with the investors for issuance of shares at a premium of ₹862.15 a unit. The quoted amount of the proposed influx was just ₹4.62 crore, but the real figure turned out to be ₹403.07 crore.
The proposal was put up before the FIPB (Foreign Investment Promotion Board), which recommended it, clarifying that a separate approval was needed for downstreaming. Mr. Chidambaram cleared it, but the approval letter did not quantify the FDI in monetary terms, allegedly to conceal the exact amount of influx. It was showed only as 46.2% of the issued equity share capital of the company to the investors, the CBI said.
In February 2008, the then Information and Broadcasting Minister received complaints about the source of funding to INX News from some media representatives. The matter was sent to the Department of Revenue (DoR). Some former MPs, besides former INX Media employee Vir Sanghvi, too approached the Finance Minister, who also referred the issue to the DoR.
The Income Tax Department initiated an inquiry and sought clarifications from the Finance Ministry’s FIPB unit on “excess” investment and 26% downstreaming in INX News. The FIPB unit officials, named in the CBI chargesheet filed on Friday, defended the decision on the FDI issue, the CBI said.
The agency alleged that correspondences between the Income-Tax Department, the FIPB unit and INX Media were on when then INX Media director Peter Mukerjea allegedly contacted Mr. Chidambaram to resolve the issues. On his instructions, it is alleged, the company directors met Mr. Karti Chidambaram at Hotel Hyatt in mid-2008.
At the meeting, a demand for $1 million was made, of which ₹9.96 lakh was paid in advance to ASCPL in the guise of consultancy, the CBI said.
As advised by Mr. Karti’s company Chess Management Services, INX Media replied to the FIPB unit's queries on the issues of “excess” investment and downstreaming. The official who received the response proposed to forward it to the Income Tax Department for further action. However, the accused FIPB officials buried the matter, saying that INX News had been told to apply afresh for downstreaming.
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