INX Media Scandal: Karti Chidambaram’s Assets Remain Attached as Tribunal Rejects Plea

Tribunal Affirms Assets Attachment.

Karti Chidambaram, an MP and the son of former Finance Minister, P. Chidambaram has suffered a big loss in a protracted legal battle. His plea has been turned down by the Appellate Tribunal on the Prevention of Money Locus (PMLA). This was an appeal to prevent the freezing of his property by the Enforcement Directorate or rather the ED. The ruling implies that his properties and bank accounts, which are worth more than eleven crore rupees, will continue to be impounded.

The concerned assets are extremely valuable. One of them is a house in the luxurious district of New Delhi particularly in the Jor Bagh house. There are also several bank accounts and fixed deposits which are part of this attachment. This ruling has reinforced the position of the agency since the ED, the investigating agency, had already granted a provisional attachment order, which is now confirmed by the ruling of this tribunal.

Asset attachment can be a strong means of agencies, such as the ED, as provided by PMLA. It does not imply that the government has become the ultimate owner of the property. It is rather a temporary seizure that denies the accused individual, in this case Karti Chidambaram, the right to sell, transfer or acquire new rights over such assets. This makes sure that the assets are not needed in case the court finally concludes that they were bought using ill money.

The tribunal is a court of specialty where an appeal is made over the actions of the ED. It heard submissions by both parties and observed evidence in this instance. The judge decided that the ED had offered a good first or prima facie case. This implies that at the face of it, the tribunal had a proper cause to suspect that these assets are linked to the alleged crime.

The legal team of Karti Chidambaram had been aggressive in its argument that the attachment was improper and legally faulty. They questioned the basis in which the ED had equated these particular assets to the case. These arguments however failed to convince the tribunal. His plea is denied and this is a huge legal setback to the Enforcement Directorate and continues to place pressure on the Chidambaram family.

This whole case is being contested by the Prevention of Money Laundering Act which is a strong legislation that aims at preventing the appearance of dirty money as clean. The first assertion made by the ED is that the associated assets were acquired with the help of proceeds of crime. This implies that the funds that were used to procure them were either directly or indirectly as a result of crime.

The Jor Bagh property forms one of the major aspects of this controversy. The ED charges that this asset was not acquired using clean and reported income. They feel that it belongs to a complicated money trail meant to conceal the initial source of the money. Karti Chidambaram has vehemently refuted this saying that he bought the property in a legal manner by declaring his income and other rightful family finances.

In the case of ED, the assets have to be attached first. They are required to finally demonstrate before the trial court that the assets were actually proceeds of crime so as to win the case. The decision of the tribunal itself only proves that the attachment is temporary. It is not a death sentence in the primary criminal case, but it is an indication that the court believes that there is a good case in the investigation by the ED.

This ruling by the court of appeal is not the culmination of the end. Karti Chidambaram can always appeal against this particular order to a superior court, the Delhi High Court and even the Supreme Court. Such a legal struggle has been prolonged over many years and has many intricate levels of financial inquiry and judicial testimony.

The short-term effect of the decision is that the assets are frozen. During the trial, he is not allowed to use the attached bank accounts and sell the property. This exerts a huge financial and legal liability on him. The ED, in its turn, is free to move forward with their primary case, which is the prosecution complaint, knowing that the assets are safe.

The INX Media Allegations Center Stage.

This scandal is popularly referred to as the INX Media scandal. The main indictment became effective in the year 2007. During this period, a media organization, the INX Media, owned by its founders Peter and Indrani Mukerjee, desired to be allocated a huge amount of foreign investment. The ED asserts that Karti Chidambaram and his companies were given kickbacks to see this go through hustle free.

In 2007, the foreign investments in India were subject to a strong governmental body approval. This committee was named Foreign Investment Promotion Board or FIPB. The Ministry of Finance included the FIPB. This approval was granted by the ministry headed by Karti who was the Union Finance Minister at the very time when his father, P. Chidambaram was the minister in charge.

INX Media has sought and colleagues with FIPB permission in order to introduce approximately 4.62 crore rupees in foreign investment. Nevertheless, the firm is purported to have breached the regulations and imported more than 305 crore rupees. They also conspicuously invested in one of their sister companies which was absolutely contrary to the conditions provided by the FIPB.

INX Media was in great trouble when the tax department and other agencies uncovered such violations. The case brought forward by the ED is that the founders of the company at the time had approached Karti Chidambaram to seek his influence. It is claimed that he aided in fixing the issue by manipulating his position with his father to make sure the FIPB and other departments did not attack the company harshly.

As a reward to this purported assistance, the ED states that Karti Chidambaram companies were given huge sums of money. These were paid in the form of consulting charges, yet the ED claims that no consulting services were ever handled. In their opinion they should be considered a bribe, simple as that, with an elaborate network of shell companies to make everything appear like a legitimate business agreement.

The companies that have been accused to have connections with Karti Chidambaram have been investigated, including Advantage Strategic Consulting Private Limited (ASCPL). The investigators assert that these companies increased the amount of the invoices to INX Media so that the illegal payments seem to be legal. It is this trail of money that has been described by the ED as the proceeds of crime.