Party admits it has extended an interest-free loan to ailing Associated Journals
The Congress said late on Friday evening that it intended to revive the newspaper that was run by Associated Journals Limited – a reference to National Herald, the paper started by Jawaharlal Nehru in 1938 — and admitted that the party had extended an interest-free loan to the ailing company.
“The Indian National Congress,” party general secretary and media chairperson Janardan Dwivedi said, “has done its duty in supporting The Associated Journals Limited to help initiate a process to bring the newspaper back to health in compliance with the laws of the land.”
He also acknowledged that this support was extended by the Congress “in the form of interest-free loans from which no commercial profit has accrued to the Indian National Congress.” Party sources said it was not known whether the paper would be revived as National Herald or given a new name.
Mr. Dwivedi, interestingly, made no reference to Young Indian, the company that Janata Party chief Subramaniam Swamy has alleged was formed through the purchase of Associated Journals, in his statement.
This was the first bit of clarity after 24 hours of conflicting statements, and silence on the part of those at the centre of the controversy.
On Thursday, Mr. Gandhi’s office threatened legal action against Dr. Swamy for accusing Congress president Sonia Gandhi and her son of illegally purchasing Associated Journals to gain ownership over the land it held across the country. Less than a day later, at the official Congress briefing, the party challenged Dr. Swamy to prove his allegations in a court of law.
“If Swamy has the guts, he should sue Rahul Gandhi and Sonia Gandhi,” party spokesperson P.C. Chacko said, adding, “It is for those who make allegations to prove the charges. If there is a violation, let them take it to court.”
Meanwhile, shortly after Mr. Dwivedi’s “clarification,” another party spokesperson Sandeep Dikshit parsed the statement: “The Associated Journals was in dire straits. Whatever Dr. Swamy may say,” Mr. Dikshit said, “the Associated Journals was a companion organisation of the Congress, and it is the party’s duty to revive the institution and the newspapers under it.”
Responding to Dr. Swamy’s allegation that the Congress’ extending an interest-free loan to acquire Associated Journals for Young Indian violated the Income Tax Act, as political parties received tax exemption, senior Congress sources told The Hindu that the Rs. 90-crore loan was in compliance both with the IT Act as well as the Representation of People Act: “There are strict accounting rules about inflows,” he said, “but there is nothing on how you spend it.”
Meanwhile, what is known thus far is that Young Indian, according to the Ministry of Corporate Affairs website, was formed on November 23, 2010 and registered under Section 25 of the Companies Act, 1956. It lists its address as 5A, Herald House, Bahadur Shah Zafar Marg, New Delhi, the office of the now defunct National Herald. While Ms. Gandhi and Mr. Gandhi hold 76 per cent stake in the new venture, the remaining shares are owned by Congress treasurer Motilal Vora, who is also the chairman-cum-managing director of Associated Journals Limited, and party general secretary Oscar Fernandes. Veteran journalist Suman Dubey has been designated as managing committee member in the new company, while National Knowledge Commission Chairman Sam Pitroda too is a member.
Meanwhile, documents filed by the Registrar of Companies point out that Young Indian is “engaged in activities to inculcate in the mind of India’s youth commitment to the ideal of a democratic and secular society and provides for application of its profits or income in pursuit thereof.”