ED Issues Order To Attach Properties Worth Rs 751.9 Crore Related To National Herald Case
Directorate of Enforcement (ED) has issued an order to provisionally attach properties worth Rs. 751.9 crore in a money-laundering case to the controversial National Herald case. According to the ED, the law enforcement-cum-economic intelligence agency, investigation revealed that Associated Journals Ltd. (AJL) is in possession of proceeds of crime in the form of immovable properties.
The agency said the properties are spread across many cities such as Delhi, Mumbai and Lucknow to the tune of Rs. 661.69 Crore and 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. The Congress-affiliated National Herald is published by AJL, and YI is associated with former Congress president and current Congress Parliamentary Party chairperson Sonia Gandhi, as well as her son and senior Congress leader Rahul Gandhi.
The case dates back to 2013 and based on a private complaint by Subramanian Swamy, in which he alleged cheating and misappropriation of funds by Gandhis in their efforts to acquire the newspaper. Mrs Gandhi and Mrs Gandhi were questioned in the past in this case and was granted bail by a trial court in December 2015.
Meanwhile, a Congress party statement said the reports of attachment of AJL properties by ED “reflects their desperation to divert attention from certain defeat in the ongoing elections in each state”.
Congress senior leader Dr Abhishek Singhvi said in the 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!!,” he added.
The directorate had initiated money-laundering investigation on the basis of process issued by metropolitan magistrate court of Delhi after taking cognizance of a private complaint. The Court held that seven accused persons including Young India, prima facie committed offences of criminal breach of trust, cheating and dishonestly inducing delivery of property, dishonest misappropriation of property and criminal conspiracy.
The Court, as per a statement released by the ED, held that the accused persons hatched a criminal conspiracy to acquire properties worth hundreds of Crores of AJL through a special purpose vehicle Young Indian. 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 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. 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, the ED statement alleged.
The ED claimed that its investigation 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, ED claimed that, shareholding of more than 1000 shareholders was reduced to a mere 1% and AJL became subsidiary company of YI and YI also took control over properties of AJL.
According to Congress, the ‘Young Indian’ is a Section-25 ‘Not-For-Profit’ company and shareholders or managing committee members of a ‘Not-For-Profit’ company are prohibited by law from getting any dividend, profit, salary or any other financial benefit.
“Therefore, the question of any gain or profit or financial benefit to either Smt. Sonia Gandhi, Shri Rahul Gandhi or any other person in ‘Young Indian’ is completely out of the line and thus, it makes any claim of illegal gain or profit or financial benefit inherently false,” Congress had said earlier.
The party had also asked in the past that ‘how can there be money laundering if there has been no transfer of any movable or immovable property/assets of Associated Journals Limited nor has ‘Young Indian’ withdrawn a single rupee from Associated Journals Limited?’
The timing of the ED order is significant, as opposition parties have accused the central government of misusing agencies, including the ED, Income Tax Department, and Central Bureau of Investigation (CBI), to settle scores during elections. Currently, assembly elections are taking place in five states: Rajasthan, Madhya Pradesh, Telangana, Chhattisgarh, and Mizoram.
