National Herald case: ED attaches Congress-linked firms' Rs. 750cr properties
What's the story
In a major development in the National Herald case, the Enforcement Directorate (ED) on Tuesday attached assets worth Rs. 751.9 crore as part of a money laundering probe.
These include properties of organizations linked to the Congress: Rs. 661cr-worth immovable properties of Associated Journals Limited (AJL) across Delhi, Mumbai, and Lucknow and Young Indian (YI)'s equity shares of AJL worth Rs. 90.21cr.
The Congress has termed the ED's move "petty vendetta tactics" amid the ongoing assembly elections in five states.
Context
Why does this story matter?
The issue came to light in 2013 when the Bharatiya Janata Party (BJP)'s Subramanian Swamy filed a complaint before a Delhi court.
He accused top Congress leaders of cheating and breach of trust in the acquisition of AJL through YI.
The ED's inquiry began based on a 2014 court order in response to his complaint. The court determined that seven defendants, including the Congress-owned YI, were guilty of criminal breach of trust, cheating, dishonest misappropriation of property, and criminal conspiracy.
Details
Assets attached under PMLA: ED issues statement
The ED has issued a statement confirming the provisional attachment of assets of the Congress-linked organizations under the Prevention of Money Laundering Act (PMLA), 2002.
It said, "Investigation revealed that [AJL] is in possession of proceeds of crime in the form of immovable properties spread across...Delhi, Mumbai, and Lucknow."
The agency further said, "Young Indian (YI) is in possession of proceeds of crime to the tune of Rs. 90.21 Crore in the form of investment in equity shares of AJL."
Details
Link between Congress and YI's acquisition of AJL
Reportedly, AJL—the former publisher of National Herald —took a Rs. 90.21cr loan from the Congress, which wasn't repaid.
The Congress sold the "non-recoverable loan" to the newly-incorporated YI for Rs. 50 lakh.
After acquiring the loan, YI sought repayment or allocation of equity shares. Eventually, AJL increased share capital and issued Rs. 90.21cr-worth shares.
With this, the shareholding of over 1,000 shareholders dropped to just 1%, and AJL became a subsidiary of YI, which also gained control of AJL's properties.
Insights
AJL was founded by freedom fighters
The National Herald case revolves around AJL's allegedly unlawful acquisition by YI.
AJL—established in 1937 by freedom fighters—published newspapers like National Herald, Qaumi Awaz, and Navjeevan. Notably, National Herald was founded by Jawaharlal Nehru and other freedom fighters in 1938.
In 2008, AJL ceased publication of papers and accrued Rs. 90.21cr in loans from the Congress by 2010.
YI was launched in 2010, and Congress leaders like Sonia Gandhi, Rahul Gandhi, and Mallikarjun Kharge, among others, are its office bearers.
Reaction
Such tactics shall not cow down Congress: Singhvi
Reacting to the latest development, Congress Rajya Sabha MP and senior advocate Abhishek Manu Singhvi reportedly termed the ED's action "petty vendetta tactics."
He asserted such ploys "shall not cow down the Congress or the opposition."
Singhvi added the central agency's action also proved that the ruling BJP was desperate "to divert attention from certain defeat in the ongoing elections" in five states.
Previous developments
Sonia, Rahul were questioned by ED last year
To recall, last year, the ED conducted several raids at premises linked to Young Indian and issued summonses to multiple Congress leaders as part of its investigation.
Among others, Sonia and Rahul were quizzed by the central agency in July and June, respectively. The Gandhis reportedly have an 86% share in YI.
Their interrogation triggered protests by Congress leaders and workers, who accused the BJP at the Centre of misusing the ED to target opposition parties.