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ED moves to attach ₹751 crore assets in National Herald case
The Congress described the development as vendetta carried out by the Bharatiya Janata Party (BJP) in the middle of five-state elections
The Enforcement Directorate (ED) on Tuesday said it has provisionally attached assets worth ₹752 crore in connection with its ongoing money laundering probe into the National Herald newspaper associated with the Congress party.
The immovable properties worth ₹661.69 crore attached under provisions of the Prevention of Money Laundering Act (PMLA) include the National Herald House in Delhi, the Nehru Bhawan in Lucknow and the National Herald office in Mumbai, all owned by the Associated Journals Limited (AJL), which publishes National Herald.
The National Herald is published by AJL and owned by Young Indian (YI) Private Limited. Congress leaders Sonia Gandhi and Rahul Gandhi are majority shareholders of YI, holding 76% shares in all. ED is probing allegations of irregularities in transactions involving AJL and YI.
READ | ‘Petty vendetta tactics’: Cong response to ED action in National Herald probe
“ED has issued an order to provisionally attach properties worth ₹751.9 crore in a money-laundering case investigated under PMLA. Investigation revealed that 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 ₹661.69 crore and Young Indian is in possession of proceeds of crime to the tune of ₹90.21 crore in the form of investment in equity shares of AJL,” the agency said in a statement.
Among other cities where immovable properties of AJL were attached include Indore, Patna and Panchkula, people familiar with the development said.
The Congress described the development as vendetta carried out by the Bharatiya Janata Party (BJP) in the middle of five-state elections.
READ | National Herald case: ED conducts raids at about dozen locations
Senior Congress leader Abhishek Singhvi called the ED action reflective of the BJP’s desperation to divert attention from “certain defeat” in the ongoing elections in five states. “These petty vendetta tactics shall not frighten the Indian National Congress in any way,” he added.
ED’s probe under PMLA is based on an Income Tax department investigation, completed in 2017, which was based on a private complaint filed by BJP leader Subramanian Swamy in 2012.
Swamy accused the Gandhis of using party funds to purchase AJL and said ₹90.21 crore were transferred from AICC to AJL at zero interest; that Young India Private Ltd (YI) received 92 million shares of AJL; and that Sonia Gandhi, Rahul Gandhi and Priyanka Gandhi Vadra purchased additional shares to gain full control of the company.
AJL was founded in November 1937 by Jawaharlal Nehru and published the National Herald, Qaumi Awaz in Urdu and Navjeevan in Hindi. Income Tax proceedings, initiated in 2017 revealed that YI purchased the ₹90.21 crore interest free loan given by AICC to AJL by allegedly making a payment of only ₹50 lakh to the former.
Investigators said YI was founded in November 2010, just 23 days prior to assignment of the ₹90 crore loan, with a nominal capital of ₹5 Lakh. “Young India did not even have any funds of its own for purchase of the loan of ₹90 crore of the AICC,” the IT department said. Sonia Gandhi and Rahul Gandhi are majority (76%) shareholders in YI.
The Congress has repeatedly said that the transaction was done to help save the newspaper and pay the salaries of journalists and staffers at a time when AJL faced huge debts. It argues that the decision helped revive the organisation and blames the central government of raking up an old issue to target the Gandhi family and for political vendetta. The ED has questioned Sonia Gandhi, Rahul Gandhi, Mallikarjun Kharge and other senior Congress leader as part of its probe in the case,
In its statement on Tuesday, the financial crimes probe agency alleged that AJL was given land on concessional rates in various cities of India for the purpose of publishing newspapers, but it closed its publishing operations in 2008 and started using the properties for commercial purposes.
“AJL had to repay a loan of ₹90.21 crore to All India Congress Committee (AICC). However, AICC treated this loan as non-recoverable from AJL and sold it for ₹50 lakh to a newly incorporated company - Young Indian - without (the latter having) any source of income to pay even ₹50 lakh,” ED said.
“By their action, the shareholders of AJL as well as donors of Congress Party were cheated by the office bearers of AJL and Congress Party,” ED alleged in its statement.
The probe, ED said, revealed that after purchasing the loan of ₹90.21 crore from AICC, YI demanded either repayment of loan or allotment of equity shares of AJL to it.
“AJL held an extraordinary general meeting (EGM) and passed a resolution to increase share capital and issue fresh shares worth ₹90.21 crore to YI. With this fresh allotment of shares, shareholding of more than 1,000 shareholders was reduced to a mere 1% and AJL became subsidiary company of YI. YI also took control over properties of AJL,” the ED statement added.
The Congress contested the allegations.
“PMLA action can only be consequential to some predicate or main offence. There is no transfer of any immovable property. There is no movement of money. There are no proceeds of crime. Indeed, there is no complainant who claims to have been cheated: not a single one. This is a prefabricated structure of deceit, lies and falsehood, of by and for the BJP, to divert, distract and digress in the middle of elections,” Singhvi said.
Officials aware of the matter said the ED investigation found that AICC advanced loans worth ₹90.21 crore to AJL over a period of time. In November 2010, YI was incorporated with Gandhi family loyalists Sam Pitroda and Suman Dubey as its founding directors with ₹5 lakh share capital.
However, a loan of ₹1 crore was received by it from a Kolkata-based company, which is being treated as a “shell company” by ED, so that it can enter into a transaction with AICC for takeover of AJL.
Meanwhile, the officials quoted above said, AJL’s registered office was shifted to Bahadur Shah Zafar Marg in Delhi.
