NEW DELHI: The Enforcement Directorate (ED) searched the residences of former finance minister P Chidambaram at Jor Bagh in New Delhi and Chennai on Saturday in connection with a money laundering case registered against his son Karti and a group of companies associated with the latter in the Aircel-Maxis case.
This was the first search carried out by the investigating agency on the premises of the former finance minister.
ED sources, however, emphasised that the searches were linked specifically to the ongoing probe into Karti's role in the Aircel-Maxis deal.
ED officials also searched at least eight other premises in a coordinated operation that began early morning on Saturday. The premises of Karti Chidambaram's chartered accountant and his personal assistants were also searched in Chennai. Karti has been summoned for questioning on January 16.
The raids were conducted after Karti refused to appear before the agency for questioning despite repeated summons issued to him in the past few months. ED had filed a chargesheet against Karti in the Aircel-Maxis case where it had alleged that Advantage Strategic Consulting Pvt Ltd (ASCPL), controlled by Karti, had received a payment of Rs 26 lakh from ATVL (the company that sold equity shares of Aircel Ltd to Malaysian company Maxis).
The payments were allegedly received close to the Foreign Investment Promotion Board (FIPB) approval granted by his father, who was then the finance minister. The agency claimed the payment was received as a quid pro quo for the FIPB approval in the Aircel-Maxis deal. The agency said that it was not a genuine and bona fide commercial transaction and that "both the payer and the payee are not able to offer any logical explanation for this transaction".
P Chidambaram denied that ED has any valid case under the Prevention of Money Laundering Act as the CBI FIR in the case has been quashed by the courts. However, senior ED officials said the CBI FIR had never been quashed and was the reason why they had warrants issued for searches conducted on Saturday.
The ED officials have seized important documents in the latest raids, according to a senior official. During the previous searches on Karti's premises, the digital evidence recovered by ED revealed that Karti had a property on the 22nd floor of Magnolias in DLF-V, Gurgaon. Karti, however, disposed of this property before ED could make any attachment proceedings, it said.
"Efforts were made to check the status of bank accounts of Karti P Chidambaram and it was learnt from the bank that Karti was closing accounts and was withdrawing money. Hence it appeared that Karti was in the process of alienating the property involved in money laundering in order to frustrate the proceedings under PMLA," ED had said in its attachment order in September last.
"The investigation carried out so far reveals that the nature and purpose of payment, made by ATVL to ASCPL as not genuine and doubtful, and indicates that the payments appear to be consideration in lieu of the irregular FIPB approval given by then FM bypassing the Cabinet committee on economic affairs," ED had recorded in its attachment order.
ED's current search is based on its examination of bank accounts in DCB Bank and in Indian Overseas Bank in Chennai where ASCPL had its account and had confirmed receipt of Rs 26 lakh dated April 13, 2006. The money so received was invested in several assets, ED claimed.
ED has already attached movable assets to the tune of Rs 90 lakh held by Karti in the form of fixed deposits (FDs) and balance in savings bank accounts and another Rs 26 lakh in FDs and bank balances of ASCPL.
In the Aircel-Maxis case, ED has claimed that "although the FDI was of Rs 3,500 crore and within the competence of the CCEA, the proposal was wrongly projected as an investment of Rs 180 crore so that it need not be sent to the CCEA to avoid detailed scrutiny". Chidambaram, as the then FM, had granted the FDI approval to Aircel-Maxis on March 13, 2006 even though he had power only to grant approval to FDIs of up to Rs 600 crore.