National Herald Manoeuvre Isn't An Internal Matter Of Congress Any More Than It Is An Act Of Smartness

The Enforcement Directorate (ED), on April 9, filed a prosecution complaint against senior Congress leaders Sonia Gandhi, Rahul Gandhi, Sam Pitroda, and others in an alleged money laundering case related to the Associated Journals Limited, which owns the National Herald newspaper. The ED probe was triggered in 2021, based on a June 2014 order issued by a Patiala House court metropolitan magistrate following a private complaint filed by senior BJP leader Subramanian Swamy.

During the investigation, the ED purportedly found that Associated Journal Ltd (AJL), founded by Pandit Jawaharlal Nehru way back in 1938, roping in several other freedom fighters, closed its publishing operations in 2008 but had several prime immovable properties estimated to be worth Rs 2000 crore. Though it had to repay a loan of Rs 90.21 crore to the All-India Congress Committee (AICC), the AICC treated the loan as non-recoverable and sold it to Young Indian, in which Rahul Gandhi and Sonia Gandhi have 38% equity stakes each, for just Rs 50 lakh. After purchasing the loan, Young Indian demanded either repayment of the loan of Rs 90.21 crore or equity shares of AJL. In an Extraordinary General Meeting of AJL, a resolution was passed to increase the share capital and issue fresh shares worth Rs 90.21 crore to Young Indian, thereby reducing the stakes of other shareholders to just 1%, as earlier alleged.

The BJP calls this hijacking of the AJL by Young Indian for a pittance with an eye on its immovable properties. The Congress rebuts this charge by saying it is the internal matter of the Congress. The BJP and other detractors of the Congress say the AJL, which was to enure for the benefit of several Congressmen, enures only for the Gandhis, whose handmaiden it has become post-hijacking. The charge is that the sleight of hand ownership and control of properties worth Rs 2,000 crore have been wrested by the Gandhis for a pittance.

This isn’t the first time the Congress functionaries have found nothing wrong with such sleight of hand. When the 2G scam rocked the nation, P. Chidambaram said there was nothing improper in the issuance of 2G licenses, though to discerning observers it was once again a sleight of hand—as many as 122 2G licenses were allotted to the chosen ones, many of whom had nothing to do with telecom operations, on a first-come-first-served (FCFS) basis, who paid a pittance of Rs 1750 per license on an average only to sell them almost back-to-back for about Rs 10,000 crore each on average to actual telcos. Chidambaram rationalised this sleight of hand as smartness. Touche! It did not occur to him that had the licenses been auctioned, the government would have got what went to the chosen ones on FCFS. Small wonder, the Supreme Court had no hesitation in cancelling all the 122 licenses allotted through the opaque and potentially corrupt FCFS in 2012.

The Congress and its allies take heart from the fact that the accused A. Raja, the then telecom minister, and others were acquitted in a criminal trial for lack of evidence. In other words, for them there is a vindication of its stand by such acquittal despite the rap on the then government’s wrist, which the cancellation of the licenses amounted to. The same brazenness marks the National Herald hijacking also. The Congress functionaries ask with injured innocence where the money trail is. Under the PMLA, the ED has to establish the money trail to nail the accused. By raising the issue of the money trail, they are tacitly conceding the charge of hijacking isn’t a figment of anybody’s imagination. The ED, however, alleges that Young Indian and AJL properties were used for the generation of further “proceeds of crime in the form of bogus donations to the tune of Rs 18 crore, bogus advance rent to the tune of Rs 38 crore and bogus advertisements of Rs 29 crore”. And these establish the money trail, it says triumphantly. Remember, the prime properties in Delhi, Panchkula, Lucknow and Mumbai fetch considerable rental income to AJL and, ultimately, to the Gandhis through the conduit of Young Indian, which is the sum and substance of its charge. Newspapers, hospitals and universities established by trusts beget state munificence in the form of free or concessional land allotments.

To be sure, both Rahul and Sonia Gandhi have got unconditional bail in the criminal matter filed, among others, under section 420 of the erstwhile Indian Penal Code, but the filing of the chargesheet by the ED could give fresh ammunition to the CBI in the criminal matter relating to the hijacking of control of AJL through Young Indian. The Congress functionaries spring to the defence of the Gandhis on another ground as well—both the AJL and Young Indian are section 25 companies, meaning they are associations having objects to promote commerce, art, science, religion, charity or any other useful purpose and not having any profit motive and who cannot declare or distribute dividends.

In India, noble purposes pass muster as charitable purposes. Such latitude is latched on with alacrity for both money laundering and enjoying a luxurious life, thanks to the touch-me-not status of charities in India. There has been a mushrooming of hospitals and universities owned by charitable trusts. How they benefit the donors and trustees is not far to seek. They buy swanky cars and luxurious houses to benefit themselves as well as finance their global gallivanting without distributing dividends. Such ostensible charities thumb their noses at the taxman, as their income is exempt from income tax.

Bofors, 2G and National Herald will continue to haunt the Congress even if the prosecution fails in nailing the Gandhis with watertight evidence. In all three cases, its arch-rival has won the perception war. That Ottavio Quattrocki, the alleged handmaiden of the Gandhis in the Bofors scam rooted in kickbacks by the Swedish gun manufacturer, was allowed to slip away from India via Malaysia and his London bank account was unfrozen are cited by the BJP to win the perception war despite the Delhi High Court granting the Gandhis a clean chit.

S Murlidharan is a freelance columnist and writes on economics, business, legal and taxation issues