Troubles increased for former Union Finance minister P Chidambaram and his son Karti as CBI officials on Tuesday morning in Tamil Nadu as well as other states in connection with the alleged favours granted in FIPB clearance to a firm, according to PTI. Official sources told the agency that the raids were carried out in Mumbai, Delhi, Chennai, and Gurugram. The raids were also carried out at Chidambaram’s Chennai residence in Nungambakkam, they added. Some reports said that raids were also carried out at Chidambaram’s hometown Karaikudi.
Why CBI carried out the raids on May 16, 2017?
The raids were carried out a day after the CBI registered a case regarding 2007 FIPB clearance given to INX Media, run by Indrani Mukerjea and Peter Mukerjea. The firm allegedly received favours when Chidambaram was the Finance Minister. The CBI has registered the case against INX Media through its director Indrani Mukerjea, Peter Mukerjea, Karti Chidambaram, Chess Management Services (a company of Karti), Advantage Strategic Consulting Limited through its Director Padma Vishwanathan.
The charged levelled by the probe agency against the accused include criminal conspiracy, cheating and taking gratification by corrupt or illegal means to influence public servant and criminal misconduct.
Karti is also facing alleged money laundering charges in connection with the Aircel-Maxis deal. His offices were raided in past as well.
What is Aircel-Maxis case?
Foreign Investment Promotion Board (FIPB) clearance was given to Aircel-Maxis by Chidambaram in 2006. On April 17 this year, PTI reported that Enforcement Directorate (ED) was probing several aspects of FIPB approval given to Aircel-Maxis including the role of Chidambaram under anti-money laundering laws.
In a statement, ED had said, “Investigations under the Prevention of Money Laundering Act (PMLA) are going on in respect of FIPB approval given to Aircel-Maxis by the then Finance Minister (Chidambaram)…In the case, foreign inflow was Rs 3,500 crore (approximately) whereas as per government policy and FIPB guidelines competent authority was Cabinet Committee of Economic Affairs for any inflow above Rs 600 crore.”
In a sealed cover, the ED recently filed before the Supreme Court a status report of its ongoing investigation in this case.
What is FIPB?
The Foreign Investment Promotion Board (FIPB) offers a single window clearance for applications on Foreign Direct Investment (FDI) in India that are under the approval route. According to the official website of FIPB (fipb.gov.in) the sectors under automatic route do not require any prior approval from FIPB and are subject to only sectoral laws.
FIPB comes under the Depart of Economic Affairs, Ministry of Finance. It is an inter-ministerial body, responsible for processing of FDI proposals and making recommendations for Government approval.
FIPB rules say, “Recommendations of FIPB in respect of the project proposals each involving a total investment of Rs 600 Crore or less would be considered and approved by the Industry Minister. The recommendations in respect of the projects each with a total investment of above Rs 600 Crore would be submitted to the Cabinet Committee on Foreign Investment (CCFI) for decision.”
What Chidambaram said
ANI reported the former Finance Minister as saying that the government was trying to silence his voice with the raids. “Government by using CBI and other agencies is targeting my son and his friends. The government wants to silence my voice,” he said, adding, “The government wants to stop me from writing as it has tried to with leaders of Opposition parties, journalists, columnists, NGOs and civil society.”
The former Finance Minister further clarified that no wrongdoings were done under his watch in connection with the FIPB approval. “Every case was processed according to the law and approval granted or refused accordance with FIPB recommendations consisting of five Government of India Secretaries,” ANI reported him as saying.
(With agency inputs)