The Enforcement Directorate has attached immovable assets and equity shares worth Rs 752 crore as part of its ongoing money laundering investigation against the Congress-promoted National Herald newspaper and companies linked to it. The immovable assets that have been attached include the National Herald’s office premises at ITO in Delhi, the Nehru Bhawan at Mall Avenue near Kaiserbagh in Lucknow and the Herald House in Mumbai, sources said.
The Congress has called the action taken on Tuesday (November 21) as “petty vendetta tactics” and dubbed the Enforcement Directorate (ED) a “coalition partner” of the BJP which, it claimed, is staring at certain defeat in the assembly polls.
What has the ED said about its latest action?
The ED has alleged that the shareholders and donors of the Congress were “cheated” by the office-bearers of Associated Journals Ltd (AJL) and the party. A provisional attachment order has been issued under the Prevention of Money Laundering Act (PMLA) against AJL and Young Indian (YI).
Under the law, such a provisional order has to be approved by the adjudicating authority of PMLA in six months following which the ED can take possession of the attached properties. “Investigation revealed that Associated Journals Ltd (AJL) is in possession of proceeds of crime in the form of immovable properties spread across many cities of India such as Delhi, Mumbai and Lucknow to the tune of Rs 661.69 crore and Young Indian (YI) is in possession of proceeds of crime to the tune of Rs. 90.21 crore in the form of investment in equity shares of AJL,” the ED said.
The National Herald is published by AJL and owned by Young Indian Pvt Ltd. Congress leaders Sonia Gandhi and Rahul Gandhi are majority shareholders of YI, holding 38 percent shares each.
What is the case?
- The money laundering case stems from a court order – metropolitan magistrate of Delhi – that took cognisance of a private complaint against alleged irregularities in the National Herald’s affairs on June 26, 2014.
- The court had held that seven accused persons and entities, including YI, “prima facie” committed offences of criminal breach of trust under various sections of the Indian Penal Code (IPC), including cheating and dishonestly inducing delivery of property, dishonest misappropriation of property and criminal conspiracy.
- The ED has said: “The accused persons hatched a criminal conspiracy to acquire properties worth hundreds of crores of AJL through a special purpose vehicle – Young Indian. AJL was given land on concessional rates in various cities of India for the purpose of publishing newspapers.”
- It further alleged that AJL closed its publishing operations in 2008 and started “using” the properties for commercial purposes. It said AJL had to repay a loan of Rs 90.21 crore to the All India Congress Committee (AICC), but the party treated it as non-recoverable and sold it for Rs 50 lakh to a newly incorporated company, Young Indian, “without” any source of income to pay even Rs 50 lakh.
- After purchasing the loan of Rs 90.21 crore from the AICC, YI demanded either repayment of loan or allotment of equity shares of AJL to it. The ED said AJL held an extraordinary general meeting (EGM) and passed a resolution to increase share capital and issue fresh shares worth Rs 90.21 crore to YI. “With this fresh allotment of shares, shareholding of more than 1,000 shareholders was reduced to a mere 1 percent and AJL became a subsidiary company of YI. YI also took control over properties of AJL,” it added.
Who all have been questioned?
The Gandhis, Congress president Mallikarjun Kharge and party leader Pawan Bansal, Karnataka deputy chief minister DK Shivakumar and his MP brother DK Suresh were questioned and their statements recorded last year. According to sources, they may be called again for questioning before the ED files a chargesheet.
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 the Gandhis committed fraud and land grabbing worth thousands of crores. He alleged that they “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.
But, when did it all really start?
It all began with the acquisition of shares of 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.
A brainchild of Nehru, AJL was never his personal property. But, 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 crore. 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 sq m 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.
The office of AJL was moved from Lucknow on September 1, 2010, to its Delhi property situated at 5A, Herald House, Bahadurshah Zafar Marg. Amid this chain of events, the AICC had advanced loans to AJL from time to time.
(With PTI inputs)