Karti’s Arrest Singes Chidambaram, But A Lot Depends On CBI’s Ability To Link Son’s Business To Ex-FM’s Actions

The arrest of Karti Chidambaram, son of former finance minister Palaniappan Chidambaram, should not lead to any presumption that the Central Bureau of Investigation (CBI) is anywhere close to nailing the duo for alleged money-laundering and benami holdings of assets. Given the ability of the CBI to snatch defeat from the jaws of victory in what looked like an open-and-shut case in the 2G scam, one has to keep one’s fingers crossed.

The CBI’s case is that Karti Chidambaram received money from INX Media, owned by Peter and Indrani Mukerjea, for help in scuttling a tax probe against the company during his dad’s run in the Finance Ministry. The Foreign Investment Promotion Board (FIPB) okayed an investment into INX Media during Chidambaram’s time, and the firm then invested money in Karti’s firm, Advantage Strategic Consulting Services. Advantage India has a Singapore subsidiary, which has investments across the globe.

Karti claims Advantage does not belong to him, but this claim may not wash, as the investigations made by S Gurumurthy suggest that he may be the real owner of the company, despite having transferred it to a close front man in 2011, when the media started taking an interest in Karti’s activities.

According to Gurumurthy, Karti owned nearly two-thirds of Advantage through a company called Ausbridge Holdings between 2006 and May 2011, but after that the ownership of Ausbridge was shifted to Mohanan Rajesh, a close Karti friend, who Gurumurthy sees as his benami frontman. As things stand, since 2011, Advantage Strategic India shares are held by four alleged benamdars, C B N Reddy, Padma Vishwanathan, Ravi Vishwanathan and one Bhaskararaman. Padma Vishwanathan is a director on Advantage’s board.

But the interesting bit is this, which hints at the possibility that they may be benami owners. The quartet have written wills transferring the ownership of Advantage to Chidambaram’s grand-daughter, Aditi Nalini Chidambaram, who is Karti’s daughter, after their deaths. And the executor of the wills is Karti.

The reason why the needle of suspicion points towards Karti and his father in this alleged case of corruption is this: if the CBI can establish that the money paid to Advantage by INX Media was a quid pro quo for the former FM’s clearance of foreign investment in INX, and for help with tax fraud cases, then their goose is cooked.

But, as things stand, it is only circumstantial proof that is available, where INX gets clearance from the FIPB during Chidambaram’s years as FM, and INX pays money to Advantage, with Advantage mysteriously changing hands to four other people. Wills made by these four parties surface to show that they will leave the property to Karti’s daughter.

But one thing is probably likely: it may be easier to prove Karti’s benami partnerships than to prove that the money Advantage got was directly related to services rendered through his father’s actions as finance minister.

The only proof to link Karti’s company with his father’s decisions as FM may lie with Indrani and Peter Mukerjea, who will have to confirm that they paid the money, but the duo are currently in jail, as accused in the murder of their daughter Sheena Bora. It’s their testimony that is going to be crucial. The key may well lie finally with Peter Mukherjea, since Indrani has only acknowledged she knows Karti and Chidambaram, but not about the investments.

Thus far, Gurumurthy’s challenge to the Chidambarams to sue him for his stories has been ignored. Gurumurthy, in his last article in The New Indian Express in May 2017, had this to say: “The only issue that stands between Karti and jail today is whether the Advantage twins are indirectly owned or controlled by Karti or not. Karti denies he indirectly owns Advantage. And his father defends him. The FIR filed by the CBI on 15th May last (2016), as reported in the media, says that Karti had brokered for the Peter and Indrani Mukherjee couple-owned INX Media Private Limited (INX) for issue of foreign investment permits by his father’s ministry, for which payments were made by INX to Advantage. If Karti is proved to own Advantage indirectly, he will face jail, perhaps accompanied by his father too in view of the alleged bribe payments by INX. Advantage twins then are the smoking gun.”

We have to wait to see whether Gurumurthy’s words are prophetic, or whether the CBI again makes a hash of the investigations. As things stand, the CBI’s FIR names Karti, his companies Chess Management and Advantage, Padma Vishwanathan, and Peter and Indrani Mukherjea for violations of the Prevention of Money Laundering Act, and Foreign Exchange Management Act.