CBI Names Sequoia Capital In FIR For Suspicious Payments To MP Karti Chidambaram

The Central Bureau of Investigation (CBI) has named global venture capital firm Sequoia Capital in an FIR based on its preliminary enquiry into Congress MP Karti Chidambaram and others into the processing and approval of proposals by Foreign Investment Promotion Board (FIPB).

The investigative agency has alleged that the VC firm suspiciously transferred funds to Advantage Strategic Consulting Pvt Ltd (ASCPL), an entity controlled by Chidambaram and his close aide S Bhaskararaman.

Besides, liquor major Diageo has also been named in the FIR for such suspicious payments.

Peak XV Partners, which separated from Sequoia Capital US in 2023, declined to comment on the issue. At the time of the alleged transaction, the entity was known as Sequoia Capital India and Southeast Asia. 

“Enquiry revealed that out of various proposals of FIPB enquired into, it was found that Diageo Scotland and Sequoia Capital have suspiciously transferred funds to ASCPL an entity controlled by Karti Chidambaram and his close aide S. Bhaskararman,” the FIR said. 

The investigation revealed that Sequoia Capital submitted an application for FIPB approval on October 13,  2008 for acquiring a 26% stake in Platinum Power Wealth Advisor for INR 9.52 Cr. This transaction was approved by the then finance minister P Chidambram, the father of Karti, on November 24, 2008. 

“Enquiry revealed that at the time when the FIPB proposal of Sequoia Capital for FDI was moved, some suspicious share transactions at exorbitant price took place between Sequoia Capital, Mauritius and ASCPL through Vasan Health Care. Instead of directly acquiring shares of Vasan group, the shares were routed through ASCPL in order to benefit Karti P Chidambaram as total of INR 22.50 Cr was paid by Sequoia to ASCPL (INR 7,500 per share) in lieu of these shares as against the purchase price of INR 30 Lakhs,” the FIR read. 

These transactions saw Sequoia’s Mauritius entity acquiring shares of the healthcare company in different tranches.

The CBI alleged that the transactions at “exorbitant” price were not in the ordinary course of business but a part of conspiracy to benefit Karti Chidambaram, who could influence the public servants.  

Even after separating from the US entity, Peak XV remains one of the most prominent investors in the Indian startup ecosystem. The firm has invested in prominent startups like Zomato, BYJU’S, Ola, Meesho, CRED, Honasa Consumer, among others. 

After the separation, Peak XV inherited a portfolio of investments of over $9.2 Bn across 13 funds in June 2023.  

From this investment portfolio, Peak XV realised nearly $1.2 Bn from exits during the 15 months after separation.