The confidence of INX directors in their ‘networking and friends’ made them continue with irregularities.
NEW DELHI: The first red flag in the INX media case was raised on 1 February 2008 by media representatives who contacted the then Information and Broadcasting minister Priya Ranjan Das Munshi about the dubious funding in the company. Munshi, prima-facie, finding merits in the case, forwarded the complaint to the Ministry of Finance.
Then came the letters on the same lines written by BJP MP Avinash Rai Khanna (7 March 2008) and Murli Manohar Joshi (1 April 2008) and later by journalist and founder director of INX media, Vir Sanghvi.
As a result of these multiple red-flags coming from credible names, the Assistant Director of Income Tax (Intelligence), New Delhi, wrote four letters on separate occasions to the Foreign Investment Promotion Board (FIPB) on 25 February 2008, 11 March, 22 April and 7 May 2008, seeking FIPB’s (Foreign Investment Promotion Board) response on these warning signs.
Hence, it can be said, without any iota of doubt, that by 7 May 2008, if not by 1 February 2008 (when the Income Tax had sent its first letter seeking details of INX media funding), it was amply clear, at least to the officials and those who were dealing/dealt with INX media, including its owners, that INX directors were caught in a web of financial irregularities.
However, such was the confidence of the INX directors in their “networking and friends” that they continued to indulge in financial irregularities by way of receiving funds—illegally, through FDI—till 25 July 2008 despite being well aware that they had become subject to a federal investigation.
Forced to take cognizance of the repeated follow-ups of the Income Tax department with the FIPB on this issue, the Mukerjeas (Indrani and her husband Peter) got an official letter from the FIPB on 26 May 2008, a copy of which was also sent to the Income Tax department, that, in essence, said that the FIPB was “verifying” about the “excess FDI” (as the Income Tax had claimed in its multiple correspondence) that the INX media had illegally received.
It was after this official letter, that was signed by Rabindra Prasad , Under Secretary, FIPB, that the Mukerjeas decided to get in touch with then Finance Minister P. Chidambaram, who, as per their confession, they had met before starting the TV channels and sought his “blessings”.
In this meeting at the North Block, Chidambaram had demanded illegal gratification by way of overseas payment and also asked them to take care of his son’s business interests. This meeting, as per the CBI’s chargesheet, is proved by the documentary proof of their (Mukerjeas’) stay at Hotel Oberoi, New Delhi, and taxi bills. The visitors’ log that is maintained at all Central government offices, not surprisingly, has been weeded out as it would have proved beyond doubt about this meeting.
Entry of Karti Chidambaram and his team
In June 2008, as per the CBI’s findings, “on the instructions of P. Chidambaram” , Indrani Mukerjea (Director of INX media), Pratim (Peter) Mukerjea and Ajay Sharma, Legal head (INX media) met Karti Chidambaram at the coffee house of Hotel Hyatt regency.
As per the CBI’s chargesheet, it was in this meeting that a demand of US$1 million was raised by Karti in lieu of helping the directors of INX media for the “situation” they were in. As per the CBI, it was after this Hyatt meeting that a bribe of Rs 9.96 lakh as an advance was paid to Karti through one of his companies (Advance Strategic Consulting).
What was the ‘financial irregularity’ that the Mukerjeas had/were committing?
On 28 May 2007, INX was approved to receive FDI of Rs 4.62 crore by the FIPB. However, violating all the rules, it arranged and got Rs 403 crore in four tranches, almost 90 times of the approval that was given. These four tranches, from three foreign investors, started on 23 August 2007 and went on till 25 July 2008.
As per the CBI’s chargesheet, the directors of INX media invested about Rs 46.41 crore in INX media between March 2007 and December 2008. However, even of this Rs 46.61 crore, only Rs 2.50 crore was a part of the Rs 403 crore (which was illegal in itself) that it had got through the FDI route for investing in INX. The rest of the money was arranged from somewhere else.
Another pertinent question that has still not been answered is what happened to the Rs 403 crore that was brought in the name of investment into INX. This money transfer had raised an alarm with the Department of Revenue as INX media, despite repeated requests, was not sharing the identity of its investors who were based in a tax haven country.
How Karti (allegedly) helped the Mukerjeas
After the June Hyatt meeting, Mukerjea “engaged” one of Karti Chidambaram’s another company (Chess Management Service), through a “freelancer” lawyer (Kumar Rao) to help them get out of this situation.
And on 26 June 2008, INX media forwarded the reply that it had got from Karti Chidambaram’s team, to the FIPB, which then forwarded the same to the Income Tax department.
Meanwhile, the FIPB officials, with the intention to help the Mukerjeas, sent a letter to them on 9 July 2008, asking them to seek permission for fresh increased FDI investment.
In effect, they were asked to apply for a permission for an act which they had already committed long before, with the active knowledge of the FIPB.
The content of the letter and the advice to seek the aforesaid permission was in fact okayed on 3 July 2008 by the FIPB. And, on the same day, INX media received an email from Karti Chidambaram’s man (allegedly) to “do the needful”. Thereafter, a cheque for an amount of Rs 9.6 lakh was signed by Indrani on 15 July, which the CBI charge-sheet says was a part of the bribe money.
CBDT informs FIPB about INX’s irregularities
On 29 July 2008, Sunita Kalita, member, CBDT, wrote to Sindhushree Khullar, who was additional secretary in the Department of Economic Affairs (DEA), Ministry of Finance, apprising them of their finding that INX media had received excess investment than it was allowed to get. The said letter was put in front of Subba Rao, who was the Secretary, Economic Affairs, by Khullar.
Then, as per the CBI charge-sheet, a plethora of officers from the Ministry of Finance, got involved in drafting a reply to this letter. The officials who played a part in drafting the reply included Ajit Kumar Dung Dung (then a section officer in the FIPB ), Rabindra Prasad (then Under Secretary, FIPB), Prabodh Saxena (Director, FIPB), Anup Pujari, Joint Secretary, Foreign trade and Khullar.
The said reply was then sent to Sunita Kalita, justifying the actions of INX media and terming them legal, on 2 September 2008. “The contentions of Khullar in the letter were misleading and by such communications, she buried both the issues on which action was sought to be taken by the department of Revenue,” reads the chargesheet. This, as per the CBI, was an illegal help that was extended to INX media.
This date (2 September) becomes important because soon after this “help” was given to INX media by the FIPB officials, four invoices in the name of three different companies, amounting to Rs 3.2 crore, were generated by INX media on 22, 24 and 26 September. The common thing in these three companies, as per the CBI chargesheet, is that all of them belonged to Karti Chidambaram.
The conspiracy continues
Under the impression that the matter has been “solved” now after the 2 September letter was sent by the FIPB, INX media, as it was asked by Karti Chidambaram’s team, approached the FIPB, seeking permission for bringing in more investments, which, in fact, they had already brought in long back.
The same application was processed by the FIPB as if it was a fresh proposal, in the last week of August, and it was approved in the 128th meeting of FIPB held on 24 October 2008, that was presided by P. Chidambaram. The circle of the crime (allegedly) was complete now.