“The court proceedings could scuttle Sonia Gandhi’s spectacular political career and ground Rahul Gandhi’s resurgent ambitions. This could puncture Congress efforts to unite the opposition parties to challenge the Modi government in Parliament where major bills are pending, and later in the 2019 Lok Sabha election. Bihar to National Herald has been a very short journey.” – Sandhya Jain
Congress president Sonia Gandhi and vice president Rahul Gandhi’s attempt to portray a court summons in a case of dubious takeover of the properties of a public limited company has failed the first test of sycophancy. The cloying media acolytes and intellectuals who spared no effort to promote the Amethi MP as legitimate future ruler of India and attacked Prime Minister Narendra Modi ad hominem, have concluded that the case is unwinnable.
Most of them question the wisdom of stalling parliament to register anger, so now the logjam continues under a different pretext, with ‘political vendetta’ changed to Vyapam et al. Surely Ms Gandhi would realise that rats are jumping ship and GST and other pending legislation notwithstanding, the Modi sarkar has been morally strengthened.
It has since emerged that a commercial building is coming up on prime land (3,478 sq m) in Bandra, Mumbai, worth around Rs 200 crore, which was allotted for a Nehru memorial library and research centre nearly three decades ago. Another commercial building has come up on a plot of land taken at Panchkula (Chandigarh) in 2005, for newspapers that were already defunct.
Now, former law minister Shanti Bhushan has decided to challenge the transfer of shares from Associated Journals Ltd (AJL) to Young Indian, a private limited company registered under section 25 of the Companies Act, 1956. Mr Bhushan’s father owned over 300 shares of AJL in 1938; his 10 children (three deceased) and the heirs of 1000-odd original shareholders were muscled out of their inheritance through serial manipulations which shocked the Congress old guard; the rest is history.
Briefly, AJL was founded in 1937 under the Indian Companies Act 1913; it owned and published the dailies National Herald (English), Navjivan (Hindi) Qaumi Awaz (Urdu), and National Herald International Weekly. The founder members included Jawaharlal Nehru, P.D. Tandon, J. Narendra Deva, K.N. Katju, Rafi Ahmad Kidwai, M.L. Sakra and K.D. Paliwal. The publications never acquired the status of papers associated with leaders like Aurobindo and Tilak; they were not official party media but were kept afloat by Congress until closure in 2008.
In this period, AJL acquired enormous properties nationwide (New Delhi, Lucknow, Bhopal, Indore, Mumbai, Panchkula, Patna, among others). Most shareholders listed with the Registrar of Companies are dead and companies holding shares defunct. Though these shares were never transferred to the legal heirs, select members of the Nehru-Gandhi family and their associates become shareholders, viz., Indira Gandhi and Feroze Gandhi. The Rattan Deep Trust and Janhit Nidhi introduced Rahul Gandhi and Priyanka Vadra into AJL.
As the Gandhis regarded AJL as the personal property of Jawaharlal Nehru, the Congress in 2011 gave it a loan of Rs 90.25 crore to write off its accumulated debts, mainly employee dues. This violated the Income Tax Act, Companies Act, Representation of People’s Act, and the Congress constitution. The loan was sanctioned by Motilal Vora in his capacity as party treasurer and accepted by him as CMD of AJL. Sonia Gandhi was then party president and Rahul Gandhi general secretary.
Thereafter, Young Indian, incorporated in November 2010 with a paid up capital of Rs 5 lakh, stepped forward and declared it would ‘own’ the AJL debt of Rs 90.25 crores; but it did not intend to pay the loan back. Instead, AJL transferred 99.1 per cent of its shares (9 crore shares of Rs 10 each) to Young Indian for a mere Rs 50 lakh and the Congress wrote off the loan as unrecoverable (read gift). The funds used by Young Indian to acquire the whole bonanza are now a separate controversy.
By this peculiar sleight of hand, Young Indian, where Sonia Gandhi and Rahul Gandhi jointly own a controlling 76 per cent shares, became beneficiaries of shares owned by other people, and a whopping loan write-off by Congress. They became de facto owners of AJL’s immovable properties worth roughly Rs 5000 crore. The balance 24 per cent shares in Young Indian are held by Motilal Vora and Oscar Fernandes. The whole farce was possible because the party funds are wholly controlled by the president and treasurer.
The bizarre legal rigmarole used to accomplish this takeover was facilitated by Chandrakant & Sevantilal Chartered Accountants, and AJL directors cum Young Indian managing committee members, viz., Sonia Gandhi, Rahul Gandhi, Suman Dubey, Sam Pitroda, Oscar Fernandes and Motilal Vora. BJP leader Subramanian Swamy took the matter to court in 2013, alleging criminal conspiracy.
The case moved jerkily, with magistrates often calling in sick, until suddenly on December 4, 2015, Delhi High Court judge Sunil Gaur upheld the trial court summons to the six Congress office bearers and Young Indian Ltd. Justice Gaur felt the Congress party could have written off the loan of Rs 90.25 crore to the publishers of National Herald, instead of assigning its shares to a company in which some of its leaders are directors; he also upheld the freedom of a private citizen (Dr Swamy) to take an interest in cases of corruption. This is a far bigger development than the technicality on which Prime Minister Indira Gandhi’s election was set aside by Justice Jagmohan Lal Sinha in 1975; the repercussions for democracy are immense.
The Gandhi legal team’s claim that no shareholder ever questioned the transfer has failed with heirs coming forward to say there was no general body meeting of shareholders to discuss and approve this transfer of property to a private firm. As legal heirs may hope to benefit from a real estate bonanza, it is imperative that the court ensure that as the land was given for publications that have officially ceased, the properties should return to the State.
Much will happen after the Gandhis make a personal appearance in the metropolitan magistrate’s court on December 19. Previously, AJL told the court that the loan was given to revive the defunct National Herald, though no move was ever made to do so and Young Indian’s objectives include inculcating democratic and secular values among the youth. The Gandhis will also have to explain the use of media-related property for commercial profit (Herald House in Delhi has been rented to the Ministry of External Affairs for a princely sum).
The court proceedings could scuttle Sonia Gandhi’s spectacular political career and ground Rahul Gandhi’s resurgent ambitions. This could puncture Congress efforts to unite the opposition parties to challenge the Modi government in Parliament where major bills are pending, and later in the 2019 Lok Sabha election. Bihar to National Herald has been a very short journey. – The Pioneer, 15 December 2015
» Sandhya Jain is a senior journalist with The Pioneer in New Delhi and the editor of the opinions forum Vijayvaani.
- National Herald Affair: It’s fraud all the way – S. Gurumurthy
- Sonia & Rahul summoned in National Herald newspaper case – IANS
- VIDEO: Swamy accuses Sonia and Rahul Gandhi of Rs 1600 crore property fraud – Hindustan Times
Filed under: corruption, delhi high court, india, nehru-gandhi family, rahul gandhi, sonia gandhi | Tagged: corruption, financial crime, national herald, rahul gandhi, sonia gandhi, subramanian swamy |