Fourth case against Karti Chidambaram: CBI registers a case for alleged relief to Diageo Scotland

The Central Bureau of Investigation (CBI) has registered a corruption case against Karti Chidambaram, son of former finance minister and Congress leader P Chidambaram, for allegedly providing relief to liquor company Diageo Scotland.

The CBI FIR said that the case relates to an alleged suspicious payment made to Advantage Strategic Consulting Pvt. Ltd (ASCPL), which is controlled by Karti Chidambaram and his close associate S Bhaskararaman by Diageo Scotland and Sequoia Capital.

This is the fourth case against Karti Chidambaram, along with three other corruption cases involving Aircel Maxis and Visa for Chinese employees and INX Media. This particular case arose out of a preliminary investigation — against Katra Holdings, ASCPL, Karti Chidambaram and others — registered by the CBI in 2018 to look into alleged irregularities in granting Foreign Investment Promotion Board (FIPB) clearance when P Chidambaram was finance minister. .

ASCPL, Diageo Scotland, Mauritius-based Sequoia Capital and Vasan Healthcare Pvt Ltd were also named by the CBI along with Chidambaram and Bhaskararaman. The case has been registered under IPC sections 120-B (criminal conspiracy), 420 (cheating) and provisions of the Prevention of Corruption Act.

The CBI stated that the investigation found that Diageo Scotland, UK was importing Johnnie Walker duty-free whisky. But in April 2005, the Indian Tourism Development Corporation (ITDC), which had a monopoly on the sale of duty-free imported alcoholic beverages in India, imposed a ban on the sale of duty-free Diageo products in India.

This ban has affected the company’s revenues. The CBI stated that 70 percent of the company’s business comes from the sale of Johnnie Walker whisky. Diageo Scotland then contacted Karti Chidambaram to request that the ban be lifted and paid $15,000 to ASCPL, which it accepted as a “consultation fee”.

The agency is also looking into suspicious stock transactions related to Sequoia Capital and Vasan Healthcare when they were waiting for foreign investment in India. According to the agency, Sequoia paid Rs 86.80 crore to ASCPL and Arun, the late founder of Vasan Healthcare, at Rs 7,500 per share, while the actual market price was Rs 1.27 lakh crore.

The CBI also alleged that Meera Arun, wife of Vasan Healthcare founder, subscribed for 5.80 lakh shares of Vasan shares at Rs 200 per share on October 28, 2008. She then gifted 3 lakh shares to her father, Dwarakanathan, who has since died. The next day, on October 29, 2008, Dwarkanathan sold half of these shares to ASCPL at a price of Rs 100 per share, according to the FIR.

The agency claims that the ASCPL account does not show any entry for payment of Rs 1.50 crore to Dwarkanathan for purchase of these shares. On October 26, 2010, ASCPL allegedly sold 30,000 of its total 1.5 lakh shares to Sequoia Capital India Growth Investment Mauritius, a sister company of Sequoia, at a price of Rs 7,500 per share, aggregating to Rs 22.50 crore, as mentioned in the FIR.

On the same day, Arun, MD, Vasan Health, also sold 52,133 shares to Sequoia Capital India Growth Investment Mauritius at Rs 7,500 per share, amounting to Rs 39.09 crore. Additionally, 33,600 shares were sold to Sequoia Capital India Growth Investment-II Mauritius at Rs 7,500 per share, amounting to Rs 25.20 crore, the FIR claimed.

The CBI also alleged that Dwarkanathan received Rs 1 crore from ASCPL on October 27, 2010, which does not appear in ASCPL’s accounts. The FIR alleges that stock transactions at such high prices did not take place in the ordinary course of business but were part of a conspiracy for the benefit of Karti P Chidambaram, who can influence public servants.