What is the INX media case in which Karti Chidambaram has been arrested by CBI

INX media case: The CBI on Wednesday arrested Congress leader P. Chidambaram's son Karti at Chennai airport on his arrival from the UK in connection with its probe in the INX media case.

New Delhi: Karti Chidambaram leaves Patiala House Courts in New Delhi on Wednesday. PTI Photo

NEW DELHI: The CBI on Wednesday arrested Congress leader P. Chidambaram's son Karti at Chennai airport on his arrival from the UK in connection with its probe in the INX media case. The CBI in an FIR had alleged that it found irregularities in the FIPB clearance to INX Media for receiving overseas funds to the tune of Rs 305 crore in 2007 when Chidambaram was the Union finance minister. It said Karti had received funds to the tune of Rs 10 lakh in the case. What is the INX media case all about: The Finance Ministry had in March 2007 received an application from the INX media for FIPB (Foreign Investment Promotion Board) approval in order to operate, manage broadcast a bouquet of television channels including Hindi entertainment channel, and multiple vernacular entertainment channels. This proposal of the INX media was recommended by the FIPB but the body only allowed FDI inflow of only Rs 4.62 crore. However, the FIPB did not recommend the downstream investment by INX Media in INX News. According to the CBI’s FIR, “INX Media (P) Limited deliberately and in violation of the conditions of the approval (i) made a downstream investment to the extent of 26% in the capital of INX News (P) Limited without the specific approval of FIPB which included indirect foreign investment by the same foreign investors and (ii) generated more than Rs 305 crores Foreign Direct Investment in INX Media (P) Limited against the approved foreign inflow of Rs 4.62 crores by issuing shares to the foreign investors at a premium of more than Rs. 800 per share." In May 2008, FIPB issued a letter to INX Media seeking clarification on both issues. The CBI alleged that the INX Media then sought to wriggle out of the issue by offering kickbacks to Karti to leverage on his family name to stay away from the probe. “Upon receipt of this letter from FIPB unit, INX Media Limited in order to wriggle out of the situation without any punitive action entered into a criminal conspiracy with Shri Karthi P Chidambaram, son of P Chidambaram, the-then Finance Minister of India, and Promoter Director of M/s Chess Management Services (P) Limited, Chennai, as to get the issues resolved/ adressed amicably by influencing the public servants of the FIPB Unit of Ministry of Finance by virtue of his relationship with the then Finance Minister," the FIR said. The FIR further stated, "..for the services rendered by Karti P Chidambaram to INX Group through Chess Management Services Limited against INX group scuttled, by influencing the public servants of the FIPB Unit of the Ministry of Finance, consideration in the form of payments were received against an invoice raised on INX Media by one Advantage Strategic Consulting (P) Limited (ASCPL).” The FIR said the “very reason for getting the invoice raised in the name of ASCPL for the services rendered by Chess Management Services was with a view to conceal the identity of Karti.” The FIR also alleged that invoices of approximately Rs 3.5 crore were raised in favour of INX group in the name of other companies in which Karti had substantial interests “directly or indirectly”. It said, "such deceitful and fallacious deal was favourably considered by Ministry of Finance and Approved by the then Finance Minister.” The CBI alleged that Karti was paid for his “services” by INX Media, with invoices raised in the name of ASCPL, the firm indirectly controlled by Karti, to the tune of Rs 10 lakh.