The Central Bureau of Investigation (CBI) has filed a new corruption case against Karti Chidambaram, Congress Member of Parliament and son of former finance minister P Chidambaram, over alleged bribery involving alcoholic beverage giant Diageo Scotland. The case stems from accusations that Karti provided favorable treatment to the company in exchange for financial transfers.
Background and Allegations
The investigation dates back to 2018, when the CBI initiated a Preliminary Inquiry (PE) into the matter. The inquiry involved Karti Chidambaram’s company, Advantage Strategic Private Limited (ASPL), which is reportedly controlled by Karti and his close associate S Bhaskararaman. Diageo Scotland, along with Sequoia Capital, allegedly made secret payments to ASPL in return for assistance in lifting certain restrictions that had been imposed on the company.
The “Secret Funds” Transfer
The CBI’s probe revealed that Diageo Scotland and Sequoia Capital covertly transferred funds into the accounts of ASPL. This company, which had previously come under the scrutiny of both the CBI and Enforcement Directorate (ED) in connection with the INX Media case, is now central to another investigation. ASPL’s name also surfaced in allegations involving the illegal facilitation of visas for Chinese workers.
Alleged Payment to Lift Restrictions
The CBI claims that Diageo Scotland, which imports the Johnnie Walker whiskey brand into India, transferred $15,000 to ASPL to help remove certain restrictions on the company. The restrictions were reportedly impacting Diageo’s operations in India, particularly with regards to its duty-free liquor sales. The company had suffered a 70% loss in sales of Johnnie Walker whiskey after the Indian Tourism Development Corporation (ITDC) awarded the duty-free sales rights to Diageo, leading to a significant blow in the brand’s market share.
Previous Legal Trouble for Karti and P Chidambaram
This new corruption case adds to a growing list of legal challenges faced by the Chidambaram family. Karti Chidambaram had previously been arrested by the CBI in 2018, followed by the arrest of his father, P Chidambaram, in connection with alleged corruption and money laundering activities. Both father and son have vehemently denied the charges, with Karti and P Chidambaram accusing the ruling Bharatiya Janata Party (BJP) government of pursuing political vendetta against them.
Impact on Karti Chidambaram
The fresh case against Karti Chidambaram could further complicate his legal troubles. As a prominent political figure, Karti’s ongoing legal battles are likely to have significant implications for his political career and public image. The accusations of bribery and corruption are a continuation of the family’s strained relationship with law enforcement agencies, particularly in the context of business dealings and foreign investments.
Denial of Corruption Charges
Despite the mounting allegations, Karti Chidambaram and his father have repeatedly denied any wrongdoing. They have asserted that the charges are politically motivated and that they are being targeted due to their opposition to the current government. The Chidambaram family has claimed that the cases against them are attempts to discredit their political standing and undermine their public service.
The Broader Context: India’s Foreign Investment and Liquor Industry
The case also sheds light on the broader issue of foreign investments and regulatory challenges in India’s liquor industry. Diageo’s struggles with the Indian market and the competitive nature of the duty-free liquor trade have created tensions between multinational corporations and local regulatory bodies. The involvement of Indian officials in facilitating or hindering such business operations has raised concerns about transparency and governance in the country’s business environment.
