Enforcement Directorate officials at the residence of Congress leader P. Chidambaram during a raid in Jor Bagh in New Delhi. Image Credit: PTI

Who is Palaniappan Chidambaram?

Palaniappan Chidambaram, 74, is currently a Member of Parliament in Rajya Sabha. Born in Kanadukathan in Sivaganga district, Tamil Nadu, he studied at the Presidency College in Chennai.

He acquired his law degree from Madras University Law College followed by an MBA from Harvard Business School in 1968. Chidambaram stayed away from his father’s business interests covering textiles, trading and plantations.

Instead, he chose to concentrate on his legal practice at Madras High Court. On becoming a senior lawyer, he opened offices in Chennai and Delhi and practised in high courts and the Supreme Court.

He joined politics in 1984 and was elected to the Lok Sabha on Congress party ticket from Sivaganga constituency.

He was re-elected in 1989, 1991, 1996, 1998, 2004 and 2009. He served as finance minister in 1996 and 2004 and was appointed the federal minister for Home Affairs in 2008.

Why is he wanted by the investigative authorities?

The Enforcement Directorate and the Central Bureau of Investigation have been pushing for his custodial interrogation.

He had moved the Delhi high court seeking anticipatory bail in the corruption case and money-laundering case.

This year, on January 25, the high court reserved its judgement on his pleas in the two cases. On Tuesday, the court dismissed Chidambaram’s anticipatory bail in the INX Media case, paving way for the investigating agencies to arrest him immediately.

What properties does he own?

Apart from some land and a bungalow in the posh Jor Bagh colony in New Delhi, Chidambaram owns agricultural land in Kodaikanal and two bungalows in Ooty, Tamil Nadu.

The Enforcement Directorate says his properties outside India include a cottage and house in Somerset in the UK and a tennis club in Barcelona, Spain.

What do the opposition parties say?

The Opposition parties are terming the case against Chidambaram as “political vendetta” and that Prime Minister Narendra Modi-led government is using ED and CBI to “character assassinate” Chidambaram.

Chidambaram has all along accused the ED of “carrying out a witch-hunt” against him in the Aircel-Maxis case and that “the allegations will be answered in court.”

While seeking protection from arrest in the case, he mentioned all evidence in the matter appeared to be documentary in nature.

CASE 1: INX Media case

The 2007 case is related to divesting of shares of INX Media to fund news channels. The Central Bureau of Investigation (CBI) alleged that Palaniappan Chidambaram, then finance minister in the Manmohan Singh-led United Progressive Alliance (UPA) government, was party to the overall scheme.

In January 2008, the financial intelligence unit of the finance ministry found irregularities in money flows (over Rs. 3.05 billion) by three Mauritius-based companies into INX Media, then owned by entrepreneurs Peter and Indrani Mukherjea. (The two are in a Mumbai prison for killing Sheena Bora, the daughter of Indrani Mukherjea from her ex-husband).

As it involved foreign funds, the Income-tax department in Mumbai forwarded the case to the Enforcement Directorate (ED), which began its probe to see if money was laundered.

The ED investigation pointed towards corruption involving powerful people. It then referred the matter to the CBI, which registered an FIR in INX Media case in May 2017.

What CBI says?

In its FIR, CBI said that INX Media approached the Foreign Investment Promotion Board (FIPB) in 2007 for permission to issue 1.498 million shares and FIPB cleared FDI of Rs46.2 million for INX Media.

But the company flouted conditional approval and instead brought in over Rs. 3.5 billion of FDI in the firm. (The foreign entities bought shares at a mammoth price, which was more than 86 times their actual value). The company also violated the order by investing money in INX News.

The Chidambaram link

CBI alleged that in 2008 when the financial intelligence unit sought clarification from INX Media, the latter engaged Congress leader Chidambaram’s son Karti, the founder-director of Chess Management Services to “amicably” resolve the issue by “influencing the public servants of the finance unit of the Ministry of Finance.

The CBI said that Karti used his influence in his father’s ministry to favour INX Media and instead of investigating the case; the finance unit extended undue favours by asking INX News to apply for fresh FIPB approval on the downstream investment it had already received.

The CBI has backed its case with a statement from Indrani, who turned approver in this matter. She insisted that INX Media got a favourable deal after she had a meeting with Chidambaram seeking FIPB clearance in 2008.

CASE 2: Aircel-Maxis case

The case is an offshoot of the 2G spectrum case (a $40 billion scam allegedly committed by politicians and government officials more than a decade ago) under the UPA government.

Aircel-Maxis case came to light following a complaint by the Aircel founder C Sivasankaran to the CBI in 2006.

It was said that then telecom minister Dayanidhi Maran had forced to sell 74 per cent of the Aircel stake to Maxis, the Malaysian company owned by T Ananda Krishnan.

The CBI had registered a corruption case against Dayanidhi Maran and his brother Kalanidhi Maran. Based on the FIR, the ED registered a money laundering case against the Maran brothers and others.

The Chidambaram factor

Chidambaram, who at that time was the finance minister, was checked for a connection in this case in 2014. It was alleged that he played a significant role in giving FIPB approval for this controversial deal, worth Rs. 35 billion. (Ideally, it should have been referred to the Cabinet Committee on Economic Affairs, as an approval through FIPB is limited to a sum of Rs. 600 billion only).

It was alleged that Chidambaram’s son Karti’s influence had worked in this case, too.

CASE 3: Air India purchase

If Aircel-Maxis deal and INX Media deals weren't enough, the former Finance Minister is also embroiled in the Air India purchase case.

The ED has summoned him for questioning on August 23. The case pertains to alleged wrongdoing in the purchase of 111 aircraft for Air India when he was Finance Minister in the UPA government.

As many as 42 Airbus and 24 Boeing aircraft were slated to be purchased but had ended up in the purchase of 111 aircraft. Chidambaram will be questioned to explain the jump in a number of purchase.

Chidambaram chaired the empowered group of ministers which finalised the decision to purchase the aircrafts in 2009. According to the FIR, private entities were favoured.