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National Herald case: ED identifies total proceeds of crime worth ₹988 crore
According to the provisional attachment order AJL acquired most of the assets as “freehold” or on “long-term lease” given by central and various state governments
New Delhi: The total “proceeds of crime”, or PoC, in the Young Indian-Associated Journals Ltd case, where Sonia Gandhi and Rahul Gandhi are being investigated by the Enforcement Directorate (ED), is ₹988 crore, according to documents from the federal investigation agency.
This includes real estate and other assets worth ₹755 crore, shares worth ₹90 crore, and rent of ₹142 crore earned since 2010-11, according to the provisional attachment order issued by ED in November, details of which have been accessed by HT. According to the provisional attachment order AJL, the parent company of National Herald, formed in 1937, acquired most of the assets as “freehold” or on “long-term lease” given by central and various state governments for running the newspaper business.
For instance, the Herald House at Bahadur Shah Zafar Marg in Delhi was given to the company on perpetual lease for ₹4.89 lakh while the Bandra property owned by AJL was acquired for ₹1.39 crore. In 2010, Young Indian (YI), in which Sonia Gandhi and Rahul Gandhi own 38% each, acquired AJL.
The ₹142 crore is the rent earned by ”AJL from these properties” after the company was acquired by YI, “since taking control over by AJL by YI in Financial Year 2010-11”, ED has stated.
Asserting that by taking over AJL, YI took complete control over the former’s properties in Delhi, Mumbai, Indore, Panchkula, Lucknow and Patna,an officer at the agency who asked not to be named said, citing ED’s attachment order that “the accrued benefit to YI includes right to enjoy all the benefits embodied in the commercial assets held by AJL at several prominent locations in the country proportionate to YI’s shareholding in AJL”.
Explaining why rent is part of the calculation of PoC, this person added: “The rent generated from the properties after they were obtained from the criminal activity relating to the scheduled offence would also be proceeds of crime, more so, since the criminal activity was undertaken to enjoy the fruits of the proceeds of crime, rent being one such benefit.”
The federal agency has claimed that it found documents during its searches on August 2, 2022, which reveal that while AJL showed advance rent of ₹58.79 crore in its balance sheets “advance rent ...amounting to ₹36.91 crore was not found to be genuine.” It added in its attachment order that there were no rent agreements, and “few parties stated they had paid rent on the directions of senior Congress leaders” and that some of the money received was from “shell entities”.
ED has also said that the rent received in the past has “majorly” been utilised in the development of commercial spaces, particularly in Mumbai, to fully exploit the business potential, according to attachment order.
Certain dubious transactions were found related to the properties in AJL’s books, a second officer in the agency claimed. “There are instances where AJL properties have been transferred or sold or mortgaged or third-party rights were created,” added this person who asked not to be named.
Citing the example of a property in Bhopal, the agency said the Bhopal Development Authority (BDA) allotted land measuring 1.14 acre in MP Nagar in the city to AJL for 30 years through a lease agreement in 1981 for printing of newspapers. But, in 2007, AJL sold portions of the building to various persons before the lease’s expiry.
Similarly, AJL mortgaged a plot it owned in Panchkula with Syndicate Bank to avail a loan for construction of a building in Bandra, Mumbai. “This evidence creation of third-party rights by availing mortgage facilities from bank,” ED said in its attachment order, adding that if not attached, all these properties may be transferred (to someone else).
The Congress has denied the charges and described the case as a “witch-hunt”.
Dr Abhishek Manu Singhvi, lawyer and member of parliament and Congress Working Committee (CWC) member told HT on Friday: “It’s a strange case of no transfer, no money flow, no money laundering, and yet a 100% not-for-profit company which can neither pay dividends nor pay salary or remuneration to its directors is being hauled up falsely and for political reasons. Additionally, it is also a strange case where cheating is alleged with not a single complainant even alleging that he or she has been cheated or how.”
Bharatiya Janata Party (BJP) leader Subramanian Swamy filed a private complaint in a Delhi court in 2012 levelling allegations that Gandhis used party funds to purchase AJL and that ₹90.21 crore was transferred from the All India Congress Committee to AJL at zero interest. The court took cognizance of his complaint in 2014 based on which ED filed a money laundering case in 2021.
The Congress has claimed the amount was against AJL’s debt, and that it was converted into equity.
