The Enforcement Directorate on Tuesday said it had issued an order to provisionally attach properties worth ₹751.90 crore in an alleged money-laundering case involving Associated Journals Ltd. (AJL), which runs the National Herald newspaper, and Young Indian. The agency alleged that the then AJL office-bearers and the Congress had cheated the company’s shareholders and donors of the party.
Explained |What is the National Herald case and why has the ED summoned Sonia and Rahul Gandhi?
Responding to the development, which comes close to the Rajasthan Assembly election, Rajya Sabha member and Congress spokesperson Abhishek Singhvi told The Hindu: “It reflects the frustration and certain defeat of the ruling dispensation in the ongoing elections.”
Questioning the action, he said: “Our stand remains the same...when the foundation doesn’t exists, how can a building stand. There is no transfer of property and hence, no transfer of proceeds from any person to any other person.”
In a post on social media platform X, Mr. Singhvi said that action under the Prevention of Money Laundering Act could only be consequential to some predicate or main offence. “...There are no proceeds of crime. Indeed, there is no complainant who claims to have been cheated: not a single one!,” he said.
Calling the attachment of AJL properties a “sign of BJP’s panic”, Congress president Mallikarjun Kharge, in a post on X, said, “This pattern of misuse of agencies during elections by the BJP establishment is not new and now stands fully exposed before the entire nation.”
“This is a prefabricated structure of deceit, lies and falsehood, of by and for the BJP, to divert, distract and digress in the middle of elections,” he said, adding: “No BJP coalition partner — CBI, ED or IT — can prevent certain impending defeat of the BJP. An assignment of loan without transfer of any immovable property or movement of money is being dressed up to justify attachment and freezing of assets of a company which runs an iconic voice of the Indian independence movement — the National Herald — only because it is linked to the Congress party and its legacy...”
The ED, in a statement, said AJL was in possession of “proceeds of crime” in the form of immovable assets worth ₹661.69 crore in several cities, including Delhi, Mumbai and Lucknow; and Young Indian to the tune of ₹90.21 crore as the equity shares of AJL.
Congress Parliamentary Party Chairperson Sonia Gandhi and former Congress chief Rahul Gandhi were on the Board of Directors of Young Indian, of which they owned 38% shares each. Last year, the ED had recorded their statements.
The ED said its probe was based on the process initiated by a Delhi court after taking cognisance of a private complaint vide an order dated June 26, 2014. The complaint had been filed by BJP leader Subramanian Swamy.
The court held that seven accused persons, including Young Indian, prima facie committed the offences of criminal breach of trust under Section 406; cheating and dishonestly inducing delivery of property under Section 420; dishonest misappropriation of property under Section 403; and criminal conspiracy under Section 120B of the Indian Penal Code.
The court had also held that they hatched a criminal conspiracy to acquire properties worth hundreds of crores of AJL through Young Indian, said the agency.
The ED said: “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 ₹90.21 crore to All India Congress Committee (AICC), however AICC treated the said loan of ₹90.21 crore as non-recoverable from AJL and sold it for ₹50 lakh to a newly incorporated company, Young Indian, without any source of income to pay even ₹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,” it said.
The agency alleged that after buying the loan from the AICC, Young Indian demanded repayment or allotment of equity shares of AJL, which held an Extraordinary General Meeting and passed a resolution to increase share capital and issue fresh shares worth ₹90.21 crore to Young Indian. “With this fresh allotment of shares, shareholding of more than 1,000 shareholders was reduced to a mere 1% and AJL became subsidiary company of YI [Young Indian]. YI also took control over properties of AJL,” it said.
As part of the proceedings, the ED has previously also recorded the statements of senior Congress leaders Mallikarjun Kharge and Pawan Kumar Bansal.
On multiple occasions in the past, the Congress has denied the charges stating that Young Indian is registered as a not-for-company under section 25 of the Companies Act, which can neither pay dividend to its shareholders nor accumulate profits.
