Congress volunteers, few days back, protested across the nation like never before.
They replicated the 2012 opposition.
Was their protest against GST? Not quite.
Was their protest against the system?
Or, were they enjoying water cannon in the peak of summer?
This case was different and more serious for the Congress party. They even set a car on fire. Leaders detained in bus.
Were they protesting against Government’s silence on China?
All of these efforts were because former party President Rahul Gandhi and interim President Sonia Gandhi were quizzed by Enforcement Directorate. Rahul had been questioned for hours before, and it was Sonia Gandhi’s turn too. After other opposition party politicians, it was Sonia Gandhi’s moment with the ED. Politicization of ED began during the tenure of former Finance Minister P Chidambaram. BJP extended its use. And, ED, these days, has become quite fond of the opposition. Opposition is saying, the government is of ED, as I analysed it in detail in a previous article.
What is National Herald Case? How were the Gandhis involved in it?
After Bofors and Agusta scandal, Gandhis are now caught up in National Herald Case. Is it purely a political vendetta of the ED, or is there something deeper that can put Gandhis in jail? Let’s discuss in detail about it.
Subramanian Swamy, side-lined by BJP and one who does not shy away from criticising BJP, did great work for BJP in 2013. He filed a petition accusing Gandhis of fraud in acquiring National Herald and appropriated properties illegally. This case is not new. In December 2015, trial court granted bail to Sonia and Rahul Gandhi for this case.
Now, ED is probing this trial court case and has opened up investigation. It is complicated but a story worth knowing – from 50 lakhs to 90 crore loan recovery claimant and then to 400 crore property. It’s still a conservative number. Some say the properties may be worth 1000-1500 crores.
I, in this article, won’t discuss about who is right and who is wrong. But, what the allegation is, let’s see to that. To remind you, nothing substantial till now is found in Bofors and Agusta against the Gandhis. But politics around it cost them power because of corruption allegation.
National Herald was established by Nehru in 1938. Publisher of this paper was The Associated Journals Limited (AJL). This was a not for profit company. They purchased properties which are now prime real estate in Delhi, Mumbai, Lucknow and Patna. In Delhi, 5A Herald house is such a prime location that even Ambani will think twice before buying. But, during the time of Congress, the paper was not doing well, and so in 2008, the publication of loss making National Herald was stopped by AJL. In terms of the sources of revenue, AJL decided to earn through renting property.
All India Congress Committee (AICC) gave non-secured loan to AJL without interest to prevent bankruptcy. In 2010, this loan amounted to 90 crores. Normally, a company would liquidate assets and pay back the loan. AJL could have done that as their properties were worth way more. But loan amount was not returned and even not demanded by Congress. The plan was bigger.
In Nov, 2010 a new company was established named Young Indian Pvt Ltd. Close aides of Gandhis – Suman Dubey and Sam Pitroda – became directors. Soon after formation, founders attributed company’s shares to Congress leaders – Oscar Fernandez, Sonia Gandhi, Rahul Gandhi and Motilal Vora. In 13 Dec 2010, Rahul Gandhi became director of Young Indian Pvt Ltd, and in 22nd Jan 2011, Sonia Gandhi joined the board as a director. Their holding was 38% each as per investigators. Motilal Vora and Oscar Fernandes had combined share of 24%.
After setting up the Young Indian Pvt Ltd, AICC (apex Congress body) suddenly decide that 90 crore loan to AJL will be taken over by Young Indian. Now, it’s Young Indian company that will decide the future of payback. In return, Young Indian paid AICC 50 lakh to takeover loan. Young Indian told AJL that they now have claim of 90 crore loan. If they can’t be paid, then instead hand over AJL shares. Income tax department say that AJL having properties worth 400 crores could pay this back easily. But, AJL issued shares worth 9 crore of the company, and 99% AJL was now sold to Young Indian.
Kindly, try to understand the chronology! An unreal journey from 50 lakhs to 90 crore loan takeover and then to acquiring 99% of company. Wow, what a masterstroke!
Investigative agencies say that there is a gap even in the starting 50 lakh amount. And, AICC handed over 90 crore loan to Young Indian in Dec 2010, two months before getting 50 lakhs. Moreover, Young Indian started working in Herald house of AJL in 2010 itself without agreement. IT department says that the 90 crore loan may also be made up. There is no record of it yet. But why 90 crores? Because that’s when 99% shares will be transferred.
ED has a lot of questions for both Rahul and Sonia Gandhi, like…
Question 1: Why did AICC transfer 90 crore loan for 50 lakhs to Young Indian?
Question 2: Did AICC not know that AJL had 400 crores worth property with which it could repay the loan?
Question 3: In 2010-11, AJL Management had clearly said that it can make company profitable, then why sell it off?
Question 4: Did Congress intend to benefit from the conflict of interest of Motilal Vora who was AICC treasurer (former), AJL CMD and shareholder of Young Indian?
Question 5: How did AICC grant loan to AJL when the Representation of People’s Act, 1950 expressly bars political parties from granting any loan?
Congress, today, wants to show that the Government is targeting opposition to distract from real issues like unemployment, inflation, communal divide, future of economy – which may not be entirely false. Congress in defence is saying that AJL (owner of National Herald) was making losses. Congress gave bailout loan of 90 crores which was not paid back. The company repaid loan by converting loan amount into equity. There may be thousand other companies that did loan share swap.
But, this is not about companies. This case is about the Congress party and Gandhis. After being involved in Bofors case for over 25 years, why did Gandhis make a deal not so transparent? Their actions raise many questions. Did they believe there won’t be an investigation? Did they think they would be in power always?
May be there is nothing illegal to be found in the investigation. Congress says Young Indian is a non-profit organization, so as per law, size of assets doesn’t matter – as shareholders or directors won’t make money. Again, property transfer did not occur in the name of Gandhis or others. So, there is no case of money laundering.
Is their defence solid? You and I cannot decide that, only the court can. But, politics, propaganda in media and online platforms have too much power over truth. It doesn’t matter that nothing was found in Bofors and Agusta even after years into investigation. What matters is people start thinking that Gandhis looted the country. That the Gandhi family is among the richest in the world.
So, whatever the fact is – Gandhis will have to face and defend yet another corruption allegation, in court and in the eye of public, which won’t be easy. Congress protested today, but they must strengthen media communication, change public perception and tell what’s what.
Still, is something shady in the deal? Most likely.
Do other companies do this kind of deals?
Should Gandhis have done that?
Kindly do think about that.
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