The Enforcement Directorate (ED) on Wednesday summoned Congress interim president Sonia Gandhi and party MP Rahul Gandhi over the National Herald Case. The summons triggered furious protests from the opposition party, which pointed out the investigating agency had closed the case in 2015. Congress leader Abhishek Manu Singhvi accused the ruling BJP of using 'puppet agencies to intimidate opponents' and of using this to 'divert attention from inflation and other problems'.
What is the National Herald case?
The National Herald case pertains to the alleged misappropriation of assets of over ₹2,000 crore in an equity transaction. National Herald was a newspaper founded by Jawaharlal Nehru and other freedom fighters in 1938. It was originally published by Associated Journals Limited (AJL).
The paper shut down in 2008 after a ₹90 crore loan from the Congress failed to revive it.
In 2010 AJL was taken over by a new outfit - Young Indian Pvt Ltd (YIL) - with Sonia Gandhi and Rahul Gandhi on the board of directors.
In 2012 BJP leader Subramanian Swamy filed a complaint accusing Congress leaders of cheating and breach of trust in the acquisition of AJL by YIL. Under the Income Tax Act no political organisation can have financial transactions with a third party.
Swamy argued assets worth crores were illegally transferred.
{{/usCountry}}Swamy argued assets worth crores were illegally transferred.
{{/usCountry}}He claimed Sonia Gandhi and Rahul Gandhi had 'taken over' the assets to gain profits. He also claimed YIL paid only ₹50 lakh for the right to recover ₹90 crore AJL owed to the party, which implies that the Congress had written off the remaining ₹89.5 crore.
The ED's probe
The ED has been probing AJL and the role of various Congress leaders since 2016; this was after it took cognisance of a Central Bureau of Investigation (CBI) case since it cannot act on its own.
The agency alleges the accused - which includes ex-Haryana chief minister Bhupinder Singh Hooda and late Congress leader Motilal Vora - 'used proceeds of crime', in the form of land illegally allotted to AJL in Haryana's Panchkula - and pledged it to get a loan from a Syndicate Bank branch in Delhi to construct a building in Mumbai’s Bandra area.
This property, valued at ₹16.38 crore, was attached by the ED in 2020.
What does the Congress say?
The Congress has maintained that YIL was formed 'with the aim of charity' and not for profit. It also maintains that the said transactions were not a financial one but a 'commercial' one. Abhishek Singhvi said: "There has been no transfer of property or cash, how can there be a money laundering case?"
Sonia Gandhi has been summoned June 8. Rahul Gandhi has been called after June 5.