ED attaches assets worth ₹752 cr in AJL-National Herald case

The court had said that the accused persons had allegedly hatched a criminal conspiracy to acquire properties worth hundreds of crores of AJL through a special purpose vehicle, the YI.

MUMBAI: The Enforcement Directorate (ED) has provisionally attached properties worth ₹751.9 crore in Mumbai, Delhi and Lucknow in the money-laundering case related to the Associated Journals Ltd ( AJL), which runs the daily newspaper, National Herald.

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It was alleged that funds of the All India Congress Committee (AICC) had been misused to take over AJL through a company, Young Indian (YI), which resulted in the acquisition of immovable assets worth hundreds of crores in several cities. The ED’s investigation revealed that AJL was allegedly in possession of proceeds of crime in the form of immovable properties worth ₹661.69 crore spread across several cities, including in Bandra East in Mumbai, Delhi and Lucknow. Further, YI is allegedly in possession of proceeds of crime of Rs. 90.21 crore in the form of investments in the equity shares of AJL. Both the properties have been attached by the agency.

The ED had initiated its investigation on the basis of a Delhi metropolitan magistrate court’s order dated June 26, 2014. The court had said that the accused persons had allegedly hatched a criminal conspiracy to acquire properties worth hundreds of crores of AJL through a special purpose vehicle, the YI. The court held that seven accused persons, including YI, had allegedly committed offences covered under Section 406 (criminal breach of trust), Section 420 (cheating ), Section 403 (dishonest misappropriation of property) and Section 120 B (criminal conspiracy) of the Indian Penal Code.

AJL was given land at concessional rates in various cities of India for the purpose of publishing newspapers, including National Herald. It closed its publishing operations in 2008 and allegedly started using the properties for commercial purposes. AJL had to repay a loan of ₹90.21 crore to the AICC; however, the latter allegedly treated the said loan as non-recoverable from AJL and sold it for ₹50 lakh to YI, according to the ED.

“The YI had no source of income to pay even ₹50 lakh. By this action, the shareholders of AJL as well as the donors of the Congress party were cheated by the office-bearers of AJL and the Congress party,” said an ED official. The ED’s investigation revealed that after purchasing the loan of ₹90.21 crore from the AICC, YI allegedly demanded either the repayment of the loan or the allotment of AJL equity shares.

AJL had thereafter held an Extraordinary General Meeting (EGM) and passed a resolution to increase the share capital and issue fresh shares worth ₹90.21 crore to YI. With this fresh allotment of shares, the shareholding of more than 1,000 shareholders were allegedly reduced to a mere one percent and AJL became a subsidiary company of YI. YI also allegedly took control of the properties of AJL, according to the ED.

National Herald is published by AJL and its holding company is YI. The ED had in August 2022 searched the Delhi office of the newspaper and 11 other locations. Last year, the ED had also quizzed then Congress chief Sonia Gandhi and MP Rahul Gandhi at its Delhi headquarters. Senior Congress politicians like Mallikarjun Kharge and Pawan Bansal were also questioned.

The Congress had called the ED action against its leaders “political vendetta”, saying there was no money-laundering in the case. It claimed that it had given the ₹90-crore loan to an ailing AJL between 2001-02 and 2010-11. Later in 2011, it said, the shares of AJL were allotted to YI and this debt was converted into equity and the loan was extinguished in the AJL books.

It was also claimed that no personal assets were made in the Congress-AJL-National Herald deal, as YI was a not-for-profit company established under Section 25 of the Companies Act. The party further claimed that AJL continued to have possession of all its assets and that YI neither owned nor controlled these properties. Sonia Gandhi and Rahul Gandhi are among the promoters and majority shareholders in YI.

The ED money-laundering case was registered after a Delhi court took cognisance of an income-tax department probe against YI based on a private criminal complaint by BJP MP Subramanian Swamy in 2013. Swamy had accused the Gandhis and others of conspiring to cheat and misappropriate funds, with YI paying only ₹50 lakh to obtain the right to recover ₹90.25 crore that AJL owed to the Congress. In February 2021, the Delhi high court issued a notice to the Gandhis, seeking their response to Swamy’s plea.