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National Herald Case: 5 lakhs in 2010 and 800 crores today, how Sonia-Rahul Gandhi kept coming under siege

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New Delhi : The Enforcement Directorate (ED) has summoned Congress President Sonia Gandhi and her son Rahul Gandhi for questioning in the National Herald money laundering case. Sonia has been called on June 8, while Rahul was called on June 2 only, but due to being abroad, he has asked for an extension till June 8. This whole case of money laundering is related to Young Indian Limited, a company owned by the Gandhi family formed in 2010, which started with a capital of 5 lakhs but according to the ED, today it has assets of about 800 crores. That too when the company is allegedly not involved in any business activities. This increase in wealth was due to only one deal – the acquisition of Associated Journals Ltd., the company that publishes the National Herald. Let’s understand the whole matter.

The whole matter at a glance
To understand the whole matter in brief, it is that in 1938 hundreds of freedom fighters under the leadership of Pandit Jawaharlal Nehru formed a company Associated Journals Limited (AJL). The aim was to start revolutionary newspapers and through them to intensify the freedom struggle. No one person had control or authority over the company. The company started issuing newspapers in English under the name National Herald, Urdu under the name of Qaumi Awaaz and in Hindi under the name Navjeevan. Apart from Nehru, 5000 other freedom fighters were also share holders in AJL. After independence, these three newspapers became the mouthpieces of the Congress. AJL had properties in prime locations in Delhi, Mumbai, Panchkula, Lucknow and Patna. In 2008, AJL stopped publishing the National Herald as its financial condition was not good. The Congress party had a debt of Rs 90 crore on it. In 2010 also AJL had 1057 shareholders. AJL was bought by a company named Young Indian Limited in 2010. The special thing is that this company was formed only 3 months ago with a capital of Rs 5 lakh and it was owned by the Gandhi family. Sonia Gandhi, her two children Rahul Gandhi and Priyanka Gandhi Vadra hold majority shares in Young Indian Limited. In this way a company formed by freedom fighters and its properties were taken over by a family.

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how did the matter unfold
Young India Limited has acquired 99 per cent shares of Associated Journal Limited. The matter came to light when several shareholders of AJL questioned the deal saying that they were not informed and their consent was not taken even though it was their right as a shareholder. These shareholders included former Law Minister Shanti Bhushan and former Chief Justice of Allahabad and Madras High Courts Markandey Katju. The father of these people was a shareholder in AJL, so he owned the shares after his death. In fact, prior to the deal, in 2010, the shares of all the shareholders were transferred in the name of AJL without any notice or information to the respective shareholders. In 2012-13, BJP leader Subramanian Swamy went to court regarding the whole matter. In his petition filed in the Delhi High Court, he alleged that the acquisition of AJL by Young India Limited was illegal. This is a case of fraud and breach of trust. He alleged that YIL acquired the right to recover AJL’s debt of Rs 90 crore by paying just Rs 50 lakh and acquired properties worth more than Rs 2000 crore.

Story of Young Indian Limited
In 2008, AJL stopped publishing newspapers due to ‘deficit’. At that time the Congress party had a debt of Rs 90 crore. After this, the Gandhi family and their close friends enter the scene. In November 2010 a company named Young India Limited is formed. It is also worth noting that at that time the UPA government was headed by Congress at the Centre. The director of that company was none other than the then General Secretary of Congress, Rahul Gandhi. Rahul Gandhi and his mother Sonia Gandhi hold 76 percent stake in YIL. The remaining 24 percent shares were in the name of Gandhi family close friends Motilal Vora (died in 2020) and Oscar Fernandez (died in 2021).

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Even before the Young Indian Company came into existence, it had got tax exemption!
Young Indian Company was exempted from paying tax under Section 25 of the Companies Act. Its premise was that this company is a charitable non-profit organization. Young Indian Limited applied for exemption from income tax on 29 March 2011. Then there was the Congress-led UPA government at the Centre. YIL’s ​​application was approved on 9 May 2011 i.e. it was exempted from income tax. The order was made effective from 2010-11 itself i.e. the company got tax exemption since it had not even come into existence and had not even applied for this benefit. The Income Tax Department’s investigation against Sonia Gandhi and Rahul Gandhi is also going on in this matter. Sonia and Rahul also went to the Delhi High Court in 2018 against the IT notice, but the court rejected their petition. The Congress challenged the High Court’s decision in the Supreme Court as well, but the Supreme Court also refused to quash the IT notice. The court, while rejecting the petition of the Congress, said that the investigation of income tax will continue in this case.

The ‘debt’ game and AJL takeover
Congress had a debt of Rs 90 crore on AJL. Congress gave the right to recover this loan to YIL, a company with majority share of Congress President Sonia Gandhi. For this, YIL gave Rs 50 lakh to Congress and got the right to recover the loan of Rs 90 crore. To recover the debt, YIL has acquired the properties of National Herald. Subramanian Swamy alleges that Congress gave YIL the right to recover loans worth Rs 90 crore and in his name, YIL acquired AJL’s real estate worth more than Rs 2000 crore.
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Started with a capital of 5 lakhs, YIL has assets worth 800 crores
According to the ED, when YIL was established in 2010, its share capital was only Rs 5 lakh. Soon he got a loan of Rs 1 crore from an alleged shell company based out of Kolkata (mask/only paper company) so that it could strike a deal with Congress to acquire AJL and all its assets. Out of this Rs 1 crore, YIL gave Rs 50 lakh to Congress and got the right to recover the debt of Rs 90 crore from AJL and eventually acquired all its properties. According to the ED, the Gandhi family-controlled YIL, which started with a capital of Rs 5 lakh in 2010, today has assets worth Rs 800 crore across the country. It also includes Herald House located at prime location on Bahadur Shah Zafar Marg near ITO in Delhi. The Herald House houses the passport office for which the government pays rent to YIL. Apart from this, YIL has a plot worth Rs 65 crore in Panchkula, Haryana. This plot was earlier in the name of AJL. The ED attached this property on December 3, 2018, in connection with the money laundering probe. Similarly, in 2018, the Union Ministry of Urban and Housing Development canceled the lease deed of Herald House on the ground that the conditions on which the Herald House was allotted in 1962 were not being followed. The allotment was given to publish the newspaper but the newspaper is not being published and commercial benefits are being taken by renting out the property.

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ED’s action so far in National Herald case

  • In 2016, the ED registered a money laundering case against former Congress treasurer Motilal Vora and former Haryana chief minister Bhupendra Hooda. This case was based on a CBI FIR.
  • In 2016, the ED started investigation into the case of alleged Congress loan of Rs 90 crore to AJL. This loan was later waived off when YIL acquired AJL. In return, Congress got Rs 50 lakh from YIL.
  • On December 3, 2018, the ED attached a plot of AJL in Panchkula. The market value of that plot was Rs 65 crore which was attached to AJL and which was owned by YIL.
  • In 2022, the ED launched another investigation against Young Indian and its office bearers and shareholders including Sonia Gandhi, Rahul Gandhi and Priyanka Gandhi Vadra.
  • On 11-12 April 2022, the ED questioned Congress leaders Mallikarjun Kharge and Pawan Bansal.

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