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Tuesday, Dec 10, 2019

Former RBI, CCI chiefs among CBI’s key witnesses in INX Media case

HT has reviewed details of their statements recorded before the agency, which are now part of the charge sheet filed against P Chidambaram, his son Karti Chidambaram , INX Media co-founder Peter Mukerjea, Khullar, Pujari and Saxena on October 18.

india Updated: Nov 14, 2019 02:08 IST
Neeraj Chauhan
Neeraj Chauhan
Hindustan Times, New Delhi
Former Union Minister P Chidambaram seen outside ED office, in New Delhi on October 30, 2019.
Former Union Minister P Chidambaram seen outside ED office, in New Delhi on October 30, 2019. (Vipin Kumar/HT PHOTO)
         

Former Reserve Bank of India (RBI) governor D Subbarao and ex-chairman of the Competition Commission of India Ashok Chawla have claimed that their subordinate officers in the Foreign Investment Promotion Board (FIPB), including then additional secretary Sindhushree Khullar, ex-joint secretary Anup K Pujari and director Prabodh Saxena, didn’t inform them that INX Media had already made substantial downstream investment in INX News -- well before making a formal application for this -- or that the department of revenue had sought an investigation in the matter.

The two senior bureaucrats, both of whom headed the department of economic affairs in the finance ministry between May 2007 and September 2011, are among key witnesses of the Central Bureau of Investigation (CBI) in its charge sheet against former finance minister P Chidambaram in the INX Media case.

HT has reviewed details of their statements recorded before the agency, which are now part of the charge sheet filed against P Chidambaram, his son Karti Chidambaram , INX Media co-founder Peter Mukerjea, Khullar, Pujari and Saxena on October 18.

As chairman of FIPB between September 2008 and January 2011, Chawla chaired the body’s 124th meeting on October 24, 2008, in which 57 proposals were cleared including that of INX. The 1973 batch Indian Administrative Service officer has claimed that it was primarily the duty of FIPB officials lower in the hierarchy, including Saxena, Pujari and Khullar, to detail the circumstances in the board meeting. He also referred to correspondence from the intelligence wing of the Income Tax department as early as April-May 2008 pointing out anomalies, including the Rs 263 crore excess investment received by the company against an approved Rs 4.62 crore, and the downstream investment made illegally.

There was a noting on the file that the revenue department wanted the issue of downstream investment by INX Media in INX News to be investigated, but this was not highlighted, he added in his statement. Chawla also claimed that the issue was not “brought to the notice of secretary economic affairs (referring to himself) or deliberated in the board note so submitted wherein the proposal has been dealt with as a fresh application.”

In his statement, Chawla has clearly stated that INX violated the Foreign Exchange Management Act (FEMA)) by making a downstream investment in its other company.

“I state that prima facie, there appears to be a violation of the provisions of FEMA, 1999, on the part of the company in making such downstream investment without approval, particularly when it was deliberated in the 98th meeting of the Board (FIPB) on May 18, 2007 that such downstream investment required separate approval of the FIPB,” Chawla said.

Subbarao, who was ex-officio chairman of FIPB between May 2007 and September 2008, has claimed that in the 98th meeting of the board, it was Pujari “who summarized the minutes of meeting and the same were submitted for approval of finance minister on May 23, 2007.” The accused-turned-approver in the case, Indrani Mukerjea, has disclosed that she met P Chidambaram at his North Block office around this time, March and May 2007.

The 1972 batch IAS officer who retired as governor of RBI in September 2013, also reiterated Chawla’s claims on INX’s downstream investment.

“As per the record, the past history of this case was not brought to the notice of the FIPB in the agenda notes for the meeting held on October 24, 2008. It is possible that the FIPB decision would have been different if this fact was brought to its notice,” Subbarao stated.

The INX Media case relates to alleged irregularities in FIPB clearance given to the media group for foreign investment to the tune of Rs 305 crore in 2007, when Chidambaram was finance minister. CBI registered a first information report on May 15, 2017, alleging irregularities in the manner the clearance had been awarded. The Enforcement Directorate (ED) filed a money-laundering case a year later. Chidambaram is currently lodged in Delhi’s Tihar jail after being arrested on August 21, 2019 in connection with the case by the CBI. The former finance minister was later arrested by ED on October 16.

Chidambaram’s counsel, senior advocate Abhishek Manu Singhvi, told HT, “A charge sheet by definition is a set of allegations. It is yet to be proved. It is to be tested in trial. These are allegations by some members (of FIPB) against the others, which are being extended to Chidambaram only to prejudice the case”.

Khullar and Saxena didn’t respond to text messages from HT seeking comment. HT couldn’t immediately establish Pujari’s coordinates.