Karti Chidambaram, the son of former finance minister P Chidambaram, was produced by the CBI in a Delhi court on Wednesday.(HT Photo)
Karti Chidambaram, the son of former finance minister P Chidambaram, was produced by the CBI in a Delhi court on Wednesday.(HT Photo)

Karti Chidambaram arrested in INX Media case: An explainer

The CBI alleges Karti Chidambaram used his influence in the finance ministry to help INX Media get approval for foreign investments from three Mauritius-based investors. His father, P Chidambaram, was the finance minister then.
Hindustan Times, New Delhi | By HT Correspondent
UPDATED ON MAR 01, 2018 12:02 AM IST

The Central Bureau of Investigation (CBI) arrested Karti Chidambaram in a case of corruption from the Chennai airport on his return from London on Wednesday morning.

A CBI spokesperson confirmed that Karti, the son of former finance minister and senior Congress leader P Chidambaram, was arrested in what has come to be known as INX Media money-laundering case. The case was registered in May 2017. Here is a timeline of the case:

The Accused

INX Media (Private) Limited, Mumbai through its then director Indrani Mukherjea

INX News (Private) Limited through its then director Pratim aka Peter Mukherjea

Karti P Chidambaram

Chess Management Services (Private) Limited through its director Karti P Chidambaram

Advantage Strategic Consulting (Private) Limited through its director Padma Vishwanathan (the CBI has alleged that this company was indirectly controlled by Karti Chidambaram)

Unknown officials of Union ministry of finance

What happened?

INX Media was incorporated on August 8, 2006 with the purpose of creating, operating, managing and broadcasting a bouquet of TV channels. The company applied the Foreign Investment Promotion Board (FIPB) on March 13, 2007 for permission to issues shares to three non-resident investors, Dunearn Investment (Mauritius), NSR PE Mauritius and New Vernon Private Equity Limited, under the Foreign Direct Investment (FDI) route. The company said shares were being issued at the face value of R10. The company further said once it received the money, it would make an investment (26% equity) in INX News Private Limited (this is called a downstream investment).

On May 18, 2007, the FIPB considered the proposal and approved an investment of R4.62 crore under the FDI route but ruled that for the ‘downstream investment’ from INX Media to INX News, a separate approval would be required. The FIBP didn’t approve downstream investment into INX News.

CBI has alleged that instead of R4.62 crore, INX Media brought in R305 crore and made further downstream investment into INX News in violation of the FIPB approval. The Income Tax department initiated a probe into the matter. The FIPB on May 26, 2008 sought a clarification from INX Media over this.

CBI’s claims

The CBI’s theory, presented in its FIR, is that INX Media entered into a conspiracy with Karti Chidambaram, son of then Union finance minister P Chidambaram. The FIR alleged that the objective of the conspiracy was to get issues “resolved/addressed amicably by influencing the public servants of the FIPB Unit of the ministry of finance by virtue of his (Karti’s) relationship with the then finance minister”.

On the suggestion of Chess Management, INX Media on June 26, 2008 sent a letter and tried to justify its action on two counts: a) that the downstream investment in INX News was in accordance with the FIBP approval (CBI says this is a false claim), b) and the excess FDI came from a premium of more than R800 per share.

CBI claims Karti’s influence made the ministry of finance officials ignore serious illegalities and show undue favour by abusing their official position. The officials, CBI alleges, advised INX News to apply for fresh approval for downstream investment though it had already been made.

CBI says payment for services rendered by Karti Chidambaram was made to Advantage Strategic. In all, CBI says there were invoices for payments of R3.5 crore raised for companies in which Karti had sustainable interest in the name creation or acquisition of media content and consultancy in respect of market research. But for the record, INX Group recorded that Advantage Strategic received a payment of R10 lakh for ‘management consultancy charges towards FIBP notification and clarification’ .

Money laundering angle

The Enforcement Directorate (ED) is looking into the money laundering aspect of the probe and where the alleged ‘proceeds of crime’ went


The CBI had registered the FIR on the charges of criminal conspiracy, criminal misconduct, and getting gratification by illegal corrupt means in order to influence public servants. Following the registration of the FIR, the CBI conducted searches at many locations including the residence of Karti Chidambaram, who has also been questioned.


The Chidambarams have said the case is motivated by political vendetta. They have also asked why, if the case involves violation of foreign investment rules by FIPB, none of the six secretaries who were members of the body have been named as accused.

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