The National Herald case relates to a equity transaction in which Congress president Sonia Gandhi and her son Rahul Gandhi are accused of allegedly misappropriating assets of Associated Journals worth over Rs 2,000 crore by paying a paltry sum of just Rs 50 lakh. The Gandhis, however, have denied any wrongdoing, but courts have found merit in the allegations against them. Besides the Gandhis, Motilal Vora, Oscar Fernandes, Suman Dubey and Sam Pitroda are among the accused in the case. The case against the Gandhis and others is being pursued by BJP MP Subramanian Swamy.
The National Herald case involves three key players — Associated Journals Ltd, Young India Ltd, and Congress.
What is Associated Journals Ltd?
The Associated Journals (AJL) was the publisher of National Herald, a newspaper launched by former Prime Minister Jawahar Lal Nehru. The AJL, too, was founded by Nehru in 1937. Besides Nehru, about 5000 other freedom fighters were stakeholders of the AJL but these numbers came down to just about 1,000 in 2010. The AJL had its registered office at Herald House, ITO of New Delhi.
What is Young India Ltd?
Young India Ltd (YIL) was set up in November 2010. Congress president Sonia Gandhi and her son Rahul Gandhi together hold a majority share of 76 per cent while rest 24 per cent stake was held by Motilal Vora and Oscar Fernandes — 12 per cent each. The YIL, too, had its registered office at Herald House at ITO, New Delhi.
How does Congress come into the picture?
The National Herald newspaper had become a defunct entity. It was no longer in print due to losses. Then the Congress thought of reviving the newspaper which, it says, had played a role in the freedom movement. The Congress went ahead and granted a Rs 90-crore interest-free loan to the AJL. The money was, the party said, to help initiate a process to bring the newspaper back to health. However, the newspaper could not be revived and the AJL failed to repay the loan to the Congress.
So what is the alleged scam?
In 2010, the Congress, which was the original lender to AJL, assigned the debt to the YIL. Following this, AJL now had to pay back Rs90 crore to the YIL. But as AJL was not in a position to pay back the loans, it transferred all its shareholding to Gandhis-owned YIL. For this, YIL paid just Rs 50 lakh. Now, the charges against Gandhis are that they took over a publicly-held company — with prime real estate properties worth over Rs 2000 crore — which had about thousands of stakeholders by paying just Rs 50 lakh.
In December 2015, former law minister Shanti Bhushan said that his father Vishwamitra was also one of the shareholders of the AJL. But Bhushan said that he was neither informed nor was his consent sought while transferring the shares to YIL. Vishwamitra, Bhushan said, had five preferential shares — more than Nehru who had just three — worth Rs 500. He also said that Kailash Nath Katju (the late Congress leader and ex-chief minister of Madhya Pradesh) had seven preferential shares and 131 ordinary shares worth Rs 2,000.
What does Subramanian Swamy say?
In November 2012, Subramanian Swamy filed a private complaint alleging that the Gandhis had committed fraud by acquiring a publicly-owned company through their own YIL. Through this fraud, he further said, both Sonia and Rahul Gandhi had got the publication rights of the National Herald and Qaumi Awaz newspapers, with properties worth thousands of crores in Delhi and Uttar Pradesh. Swamy alleged that the loan which Congress gave to AJL was illegal as political parties are not allowed to lend money for commercial purposes. The Gandhis, however, said that the Congress had not received any commercial profit on its loan to AJL.
What have the courts found?
In June 2014, Metropolitan Magistrate Gomati Manocha summoned all accused in the case, including the Gandhis. She said that evidence before her suggested that YIL was in fact created as a “sham or a cloak” to convert public money to personal use to acquire multi-crore assets of AJL. The magistrate said that the complainant had established a prima facie case against the accused under Section 403 (Dishonest Misappropriation of Property), Section 406 (Criminal Breach of Trust) and Section 420 (Cheating) read with Section 120B (Criminal Conspiracy) of the Indian Penal Code (IPC).
Currently, Sonia and Rahul Gandhi are out on bail granted by Patiala House Court in 2015.
- November 2012: Subramanian Swamy files criminal complaint alleging land grab by Gandhis
- June 2014: Magistrate summons all accused and says prima facie evidence was against them
- August 2014: The ED launches a probe to see if there was any money laundering in the case.
- September 2015: The ED reopens the investigation
- December 2015: Patiala House court grants bail to Sonia, Rahul Gandhi
- February 2016: The SC refuses to quash proceedings against accused
- May 2019: The ED attaches National Herald properties worth Rs 16.38 crore