National Herald case: 'Criminal conspiracy' to take over AJL properties worth ₹2K crore among ED's charges against Rahul, Sonia Gandhi

The Enforcement Directorate (ED) on Tuesday filed a chargesheet against Leader of Opposition in the Lok Sabha Rahul Gandhi and senior Congress leader Sonia Gandhi in connection with the National Herald case.

The chargesheet was filed under sections 44 and 45 of the Prevention of Money Laundering Act (PMLA) for "commission of the offence of money laundering" as defined under Section 3 of the Act along with Section 70 related to offences by companies seeking to establish "vicarious liability" of the office bearers and executives of the firm. 

Accused named in the chargesheet

The ED has named Sonia Gandhi as accused number 1 and her son Rahul as the accused number 2 in its prosecution complaint under various sections of the PMLA Act. 

The other accused named in the chargesheet are Overseas Congress president Sam Pitroda and senior Congress leader Suman Dubey besides Young Indian Limited (YIL) and Dotex Merchandise Private Limited, and Sunil Bhandari of Dotex Merchandise. 

ED's big reveal in the case

As per the ED chargesheet against the Gandhis, a "criminal conspiracy" was carried out by Congress leaders to "usurp" properties worth ₹2,000 crore of AJL by transferring 99 per cent shares for just ₹50 lakh to Young Indian Limited (YIL), as per news agency PTI. 

AJL is the publisher of the National Herald newspaper and was acquired by YIL, a company where Sonia Gandhi and Rahul Gandhi are the majority shareholders. AJL also published two other newspapers -- Navjeevan in Hindi and Qaumi Awaz in Urdu until 2008, when the paper closed down with a debt of over ₹90 crore.

The newspaper had to cease its operations in 2008 since it failed to modernise its print technology and was running losses for several years due to lack of advertising revenues and overstaffing. In 2016, the AJL decided to relaunch the 3 dailies -- National Herald, Navjeevan, and Qaumi Awaz. 

Sources within the ED claimed that with this transfer, the accused effectively transferred the "beneficial" ownership of all AJL properties worth thousands of crores to Sonia Gandhi and Rahul Gandhi. 

But how did they manage to do this? The ED found during its probe that the accused entered converted the outstanding loan amounting to ₹90.21 crore given by Congress to AJL into ₹9.02 crore equity shares and transferred all the shares in favour of YIL. The ED questioned both the Gandhis during its probe. 

The mother-son duo hold 38 per cent shares each of YIL, making them the majority shareholders of the company. The ED, however, said the proceedings against late Congress leaders Motilal Vohra and Oscar Fernandes stood "abated" and is likely to file a supplementary chargesheet in the coming days. 

Vohra and Fernandes were "close associates" of the Gandhis and held the remaining 24 per cent in Young Indian Limited, as per the Enforcement Directorate.

Though Young Indian was incorporated as 'not for profit' or charitable company under Section 25 of the Companies Act, the ED said that its investigation found "no such charitable activity in the company" as there were no expenses towards its declared charitable activities during its existence. 

The central agency has identified "proceeds of crime" in this case at ₹988 crore and the current market value of the linked assets at ₹5,000 crore. Earlier this month, the ED initiated steps to take possession of properties worth ₹661 crore belonging to the Associated Journals Limited (AJL). 

Formal notices were issued to property registrars in Delhi, Mumbai, and Lucknow. The occupants of these properties have been ordered to vacate the premises. 

Subramanian Swamy's role in the case

This is likely the first instance when the central agency's case stems from a trial court taking the cognisance of a private complaint and subsequent issuance of summons to the accused for initiating a trial.

The ED's probe, which formally began in 2021 following a Patiala House court order, stems from a complaint filed by BJP leader and advocate Subramanian Swamy in 2012 before a Delhi court.

In his complaint, Swamy accused Sonia Gandhi, Rahul Gandhi, and other Congress leaders of allegedly orchestrating a fraudulent takeover of AJL's properties. He claims that YIL "took over" the assets of AJL in a "malicious" manner.

During its probe, the ED conducted searches and seizures across multiple locations and claimed that it had uncovered documents pointing to additional layers of financial irregularities. 

As per the central agency, the AJL-YIL network was allegedly used to generate illicit funds worth ₹18 crore through fake donations, advance rent of ₹38 crore and ₹29 crore through advertisements. 

The National Herald newspaper was founded by India's first Prime Minister Jawaharlal Nehru in 1938 as a tool to win Independence and was also banned by the British government during the 1942 Quit India movement.