Sonia Gandhi is set to appear at the ED office for questioning in the National Herald case. The Congress is carrying out a series of planned protests through the day across states while the party has slammed vendetta politics by the BJP. Her son and Congress leader Rahul Gandhi had earlier been questioned by the agency, while the party had held ‘Satyagraha’ demonstrations.
But what is the National Herald case? News18 explains:
When Was the Case Filed?
BJP leader Subramanian Swamy filed the case against the Gandhis in 2012, accusing them of misusing party funds to purchase a company that published the National Herald newspaper. On November 1, 2012, Swamy filed a private complaint in a Delhi court, alleging that Sonia and Rahul Gandhi committed fraud and land grabbing worth thousands of crores. In his complaint, he claimed that the Gandhis “fraudulently acquired properties of Associated Journals Ltd (AJL) in Delhi, UP, and other places worth Rs 1,600 crore” through the private company Young Indian, which they owned.
A Long Genesis
But the Enforcement Directorate summons to Sonia Gandhi and Rahul Gandhi, the top leadership of the Congress, in a money-laundering probe linked to the over a decade-old National Herald case, seems a culmination of a complex and intricate case of company law and shares transfer.
The genesis of the controversy lies in the acquisition of shares of the Associated Journals Ltd (AJL) on January 26, 2011.
The AJL was incorporated as a public limited company on November 20, 1937 under the Indian Companies Act, 1913, for the purpose of publication of newspapers in different languages. It started publishing newspapers such as “National Herald” in English, which was founded by Jawaharlal Nehru in 1938.
The company also published two other dailies, Qaumi Awaz in Urdu and Navjeevan in Hindi, in addition to the National Herald.
Nehru founded AJL, which was his brainchild. It was never his personal property, however, and it was an unlisted public company with 5,000 freedom fighters as shareholders. Apart from Nehru, AJL stalwarts such as Purushottam Das Tandon, Acharya Narendra Dev, Kailash Nath Katju, Rafi Ahmad Kidwai, Krishna Dutt Paliwal, and Govind Ballabh Pant signed the Memorandum of Association.
The real estate value of AJL is estimated to be Rs 5,000 crores. It has properties in New Delhi, Lucknow, Bhopal, Mumbai, Indore, Patna, and Panchkula, as well as the Herald House in New Delhi, which is a six-story building with approximately 10,000 square metres of office space.
AJL began reporting losses, and in April 2008, it formally ceased printing and publishing newspapers, including The National Herald.
The properties were allotted for carrying out newspaper business and publication of newspapers in different languages. However, it was also allowed to let out these properties on rent to cater to its publication business, post-closure of the newspaper.
The office of AJL was shifted from Lucknow on September 1, 2010 to its Delhi property situated at 5A, Herald House, Bahadurshah Zafar Marg.
Amid this chain of events, the All India Congress Committee (AICC), an apex body of the Congress, had advanced loans to AJL from time to time.
The Loans Advanced
On March 31, 2010, there was outstanding loan of Rs 88,86,68,976 (over Rs 88 crore) and a further loan of Rs 1.35 crore was received during the period April 1, 2010 to December 16, 2010, aggregating to Rs 90.21 crore.
On December 16, 2010, the AICC transferred the entire outstanding loan of Rs 90.21 crore due from AJL in favour of appellant company, Young Indian, for a consideration of Rs 50 lakh.
Further, almost 99.99 per cent shares of AJL were transferred to Young Indian.
On December 13, 2010, in the first Managing Committee meeting of Young Indian, Rahul Gandhi was appointed as Director.
Young Indian is a private company founded on November 23, 2010, with Sonia Gandhi and Rahul Gandhi jointly owning the majority (76% of the shares). Congress leaders Motilal Vora and Oscar Fernandes own the remaining shares (24%). (12 per cent each). It is headquartered in New Delhi at 5A, Herald House on Bahadur Shah Zafar Marg.
On January 22, 2011, a fresh allotment of the shares of Young Indian were made, in which 1,900 shares, having paid-up value of Rs 1,90,000, were granted to Rahul Gandhi and 1,350 shares with a paid-up amount of Rs 1,35,000 in the name of Sonia Gandhi among other share holders.
In order to fulfil its objective of acquiring 100 per cent shares of AJL, Rahul Gandhi, along with his sister Priyanka Gandhi Vadra, purchased additional shares amounting to 47,513 and 2,62,411, through Ratan Deep Trust and Janhit Nidhi Trust, respectively, allegedly without complying with the provisions of the Companies Act.
The Allegations
According to Swamy’s complaint, the Gandhis used Congress party funds and took over AJL to try to acquire more than Rs 2,000 crore in property assets, in addition to financial fraud and land grabbing. Furthermore, he claims that AJL approved the transfer of an unsecured loan of Rs 90 crores from the All India Congress Committee at zero interest, with Young Indian receiving all nine crores of the company’s shares (at Rs 10 each). According to Sections 29A to C of the Representation of the People Act, 1951, and Section 13A of the Income Tax Act, 1961, it is illegal for a political party to lend money for commercial purposes. Swamy also claims that the Gandhis used deception to “take over” assets worth thousands of crores in a “malicious” way.
With inputs from IANS.
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