On Monday (June 13), Congress scion Rahul Gandhi appeared before the Enforcement Directorate after he was issued summons by the central agency in connection to a money laundering case related to the National Herald case.
He was interrogated for several hours and his statement was recorded under the Section 50 of the Prevention of Money Laundering Act (PMLA). Reportedly, the Congress leader was quizzed by the Assistant Director of the ED and the questioning was supervised by a Deputy Director.
Gandhi’s statement was typed out by another officer. He may be summoned for further questioning on Tuesday (June 14). It must be mentioned that the ED had recorded the statements of all those involved in the case, with the exception of Rahul Gandhi and Sonia Gandhi.
#WATCH | Congress leader Rahul Gandhi accompanied by party leaders and workers marches to the Enforcement Directorate office in Delhi to appear before it in the National Herald case pic.twitter.com/8sd7VctfEG
— ANI (@ANI) June 13, 2022
Although Sonia Gandhi was asked to appear before the central agency on June 8, she had to be hospitalised for Covid-19. She has now been asked to appear before the Enforcement Directorate on June 23, 2022.
Rahul Gandhi was summoned by ED on Monday (June 13) in relation to a case that was lodged 9 months ago. The case sought to investigate financial irregularities under PMLA associated with National Herald.
Citing sources, India Today reported that the Congress scion was quizzed about his association with two key companies, namely, Young Indian Limited (YIL), and Associated Journals Limited (AJL). He was asked about the Congress’ keenness to revive National Herald and the loans sanctioned to keep it afloat.
The publishing company of the National Herald goes into debt
National Herald was started by India’s first Prime Minister Jawaharlal Nehru in 1938 to convey the concerns of Congress’ liberal brigade. Following India’s independence, it metamorphosed into the mouthpiece of the Congress party.
The Associated Journals Limited (AJL) was the publishing company of the National Herald newspaper. It was also involved in the publication of the Urdu newspaper Qaumi Awaz and Hindi paper Navjivan. By April 2008, AJL was in huge debt and owed the Congress party a whopping sum of ₹90.26 crores.
The party had sanctioned loans to the company from time to time at 0% interest to keep it afloat. When it became unsustainable, AJL formally drew curtains over the printing and publication of its newspapers in 2008. The number of shareholders was down to 1000 in 2010 from 5000 at the time of its establishment.
Debt owed to Congress party transferred to Gandhi-owned company
Another company by the name of Young Indian Limited (YIL) was created in 2010 as a private, not-for-profit charity under Section 25 of the Companies Act of 1956. The Gandhis (including Rahul and Sonia) owned 83.3% of the shares in YIL (as per Income Tax records).
Congress leaders Motilal Vora and Oscar Fernandes owned 15.5% and 1.2% of the shares respectively. YIL paid ₹50 lakhs to the Congress party and transferred the debt of ₹90.26 cr owed to it by AJL to itself.
Given that AJL was not in a position to clear its debt, the Young Indian Limited acquired a majority of its share equities and eventually the whole company. As such, all assets of the Associated Journals Limited were incorporated into the Gandhi-owned Young Indian Limited.
This included real estate assets, worth over 2000 crores, which are located in posh localities of Mumbai, New Delhi, Lucknow, Bhopal, Indore, Patna and others. After acquiring AJL, Young Indian Limited announced that the publication of newspapers was not the objective of the not-for-profit charity.
Nonetheless, in 2016, YIL relaunched the 3 newspapers, including the National Herald, in a digital format.
Allegations leveled by Subramanian Swamy
In 2011, BJP leader Subramanian Swamy claimed that YIL was floated by the Gandhis to acquire the real-estate assets of AJL. He also accused Rahul Gandhi and Sonia Gandhi of defrauding their own party and approached the trial court in 2013.
He claimed that YIL was able to write off debt totaling ₹90.26 crores for just ₹50 lakhs. Swamy said that the decision of the Congress party to extend loans to AJL for commercial purposes was illegal.
The BJP leader alleged that the land, on which the National Herald House is built, was given at a concessional rate by the government to carry out the publication of newspapers. He claimed that the building was being illegally used by the Gandhis for renting and commercial purposes.
Progress of the National Herald scam case so far
In 2013, Subramanian Swamy approached the trial court in Delhi against Young Indian Limited. Metropolitan Magistrate Gomati Manocha noted that the evidence suggested that YIL was a cover to ‘convert public money to personal use’.
The trial court held that a prima facie case was made out against the accused for cheating, criminal conspiracy, criminal breach of trust and misappropriation of property. The judge noted that the accused in the case “acted in consortium with each other to achieve the said nefarious purpose / design”.
The Metropolitan Judge, however, added that the accused would be able to refute the allegations leveled against them. When the Gandhi family was summoned by the trial court, they got a stay on the order from the Delhi High Court.
A probe by the Enforcement Directorate (ED) was initiated in August 2014, then closed in the following year owing to a technical problem and resumed again in September 2015. The trial court also took into consideration an investigation conducted by the Income Tax Department.
The Gandhis and other accused in the National Herald scam case were granted unconditional bail by the Patiala High Court in December 2015. However, the court refused to quash the proceedings against them citing ‘no political vendetta.’
It also noted that it was one of the exceptional cases where national leaders of the Congress party were under scrutiny. The court pointed out that it would be ‘preposterous’ to deny criminality in the transactions involved in the case.
The Gandhi family then approached the Supreme Court, which directed them to face criminal proceedings for a free and fair trial. In 2020, Subramanian Swamy approached the Delhi High Court against a trial court order dismissing his petition to lead evidence.
The Delhi High court stayed the proceedings of the trial court and issued notices to all the accused in 2021.