New Delhi: The Enforcement Directorate (ED) on Monday sought an explanation from Karti Chidambaram, son of former Union finance minister P.Chidambaram, and a company in which he has invested, for alleged violations of foreign exchange laws.
The ED looked at investments in Vasan Healthcare Pvt. Ltd, including those where existing shareholders sold to the investors (these are called secondary investments or sales) through the lens of FEMA (Foreign Exchange Management Act), a senior ED officer said on condition of anonymity.
This person added that the showcause notices have been issued to Karti Chidambaram, Vasan Healthcare, its promoter director A.M. Arun, his wife and father-in-law, and to venture capital firms that have invested in Vasan.
Vasan Healthcare’s main venture capital investors are Sequoia Capital India Advisors Pvt. Ltd and GIC Pte. Ltd (formerly Government of Singapore Investment Corporation).
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While Karti Chidambaram and A.M. Arun could not be reached for response, Sequoia declined to comment on the matter.
The total “amount of contravention” is Rs45 crore according to a statement from the ED. “Karti P. Chidambaram appears to be the controller and ultimate beneficiary in these transactions,” the statement added.
In a post on Twitter, Karti Chidambaram said: “Oh wow! If I am served a ‘notice’, it’s a Big if, for supposed FEMA violations of a co in which I was never a shareholder or director, Ummmm.”
The ED said that preliminary investigation had revealed that Vasan Healthcare “had received investments from the funds of Sequoia and WestBridge, based at Mauritius and also through investment arms of GIC, Singapore.”
“The Enforcement Directorate has the habit of recycling allegations from time to time. Today’s press release by the ED is another example. The allegations in the press release are baseless, totally false and ridiculous,” P. Chidambaram said in a statement.
Chidambaram added that no notice has been served upon Karti Chidambaram so far. If a notice is received, a suitable reply will be sent, he said. “By targeting Karti Chidambaram with baseless notices, the government cannot silence my voice or stop my writing,” Chidambaram said.