In a big blow to Congress, the Directorate of Enforcement (ED) has attached assets worth Rs 751 crore in its money laundering investigation in Congress-run National Herald newspaper.
The ED has attached immovable properties worth Rs 661 crore belonging to AJL in Delhi, Mumbai and Lucknow, while the central agency attached equity shares of Young India.
The Congress alleges that the BJP is leveraging the ED for political persecution, while the BJP maintains the ED's impartiality. Directors of Young Indian and Associated Journal, namely Sonia Gandhi, Mallikarjun Kharge, and Rahul Gandhi, find themselves directly implicated.
“Directorate of Enforcement (ED) has issued an order to provisionally attach properties worth Rs 751.9 crore in a money-laundering case investigated under the Prevention of Money Laundering Act (PMLA), 2002. Investigation revealed that M/s 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 M/s. 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,” ED said in its statement.
The case of National Herald was first taken up by BJP leader Subramanian Swamy in 2012. In August 2014, the ED suo moto lodged case of money laundering against seven people which included Sonia Gandhi, Rahul Gandhi, Moti Lal Vora, Oscar Fernandes, Aam Pitroda and Suman Dubey.
The ED statement said on Tuesday that court held that seven accused persons including M/s Young India, prima facie committed offences of criminal breach of trust u/s 406 of Indian Penal Code, cheating and dishonestly inducing delivery of property under section 420 (cheating) of IPC, dishonest misappropriation of property u/s 403 and criminal conspiracy u/s 120B of IPC.
The ED's attachment should not be interpreted as a final verdict. Both companies retain the right to appeal this decision in court. The eventual court ruling will determine the fate of the attached properties, shaping the trajectory of this high-stakes political and legal battle.
What is the case
AJL was given land on concessional rates in various cities of India for the purpose of publishing newspapers. AJL closed its publishing operations in 2008 and started using the properties for commercial purposes. AJL had to repay a loan of Rs 90.21 crore to All India Congress Committee (AICC), however AICC treated the said loan of Rs.90.21 Crore as non-recoverable from AJL 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,” 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.
The ED probe has revealed that after purchasing the loan of Rs 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 Rs 90.21 crore to YI. With this fresh allotment of shares, shareholding of more than 1000 shareholders was reduced to a mere 1% and AJL became subsidiary company of YI. YI also took control over properties of AJL,” ED said on Tuesday.
In a Nutshell:
- National Herald was launched by Jawahar Lal Nehru along with 5,000 freedom fighters in 1938
- The newspaper was run by Associated Journal Limited or AJL
- After independence it became mouthpiece of Congress
- AJL was responsible for running National Herald in English only
- Despite getting loan Congress, the newspaper got closed in 2008
- In 2010, Young India Limited (YIL) was formed, which took over AJL
- In YIL, the shareholding of Sonia-Rahul is 76%
- Congress transferred loan of Rs 90 crore which it had given to AJL to YIL
- YIL has been accused of grabbing Rs 2000 crore assets of AJL by paying just Rs 50 lakh