REPLUG: Explained — what’s the National Herald case that haunts Congress

The Enforcement Directorate (ED) on Monday summoned Congress president Sonia Gandhi and her son Rahul Gandhi in the National Herald case. While Rahul has been summoned on June 2, Sonia will be questioned on June 8.

Here’s is a lowdown on the case:

What’s the National Herald case all about?

Sonia, Rahul and their associates, have been charged with misappropriating profit and assets worth over ₹2,000 crore of Associated Journals Limited (AJL), after allegedly acquiring through fraudulence all its shareholdings and properties, via the company Young Indian.

AJL and National Herald

AJL, a brainchild of Jawaharlal Nehru, was founded in 1937 as an unlisted company to support 5,000 freedom fighters who were made its shareholders.

The company published the English daily National Herald, as well as Qaumi Awaz in Urdu and Navjeevan in Hindi. The newspapers, however, were shut down in 2008 after the parent company ran into a debt.

AJL had earlier taken an interest-free loan of ₹90.25 crore from Indian National Congress.

Also read: ED summons Sonia and Rahul; BJP using puppet agencies, says Congress

In 2011, Young India, which has Sonia and Rahul on its board of directors, took over all the shareholding and properties worth ₹5,000 crore.

Young India was set up in 2010, with Rahul as its director. Both Sonia and Rahul had 76 per cent shares in the company while the remaining 24 per cent were held by Congress leaders Motilal Vora and Oscar Fernandez.

In 2012, BJP leader Subramaniam Swamy filed a case against Sonia, Rahul and other Congress leaders, accusing of acquiring AJL through “malicious” to grab the company’s properties worth ₹16 billion apart from enjoying its profits.

Charges against Gandhis, Congress

Swamy said, by acquiring AJL through Young India, the Congress gained the publication rights of National Herald and Qaumi Awaz and real estate properties, which were originally given to Nehru by the government for the publication of newspapers.

The BJP leader said the loan given by Congress to AJL was “illegal” as it was taken from party funds and the Income Tax Act prohibits political organisations from making financial transactions with a third party.

Swamy alleged that Young India during AJL’s acquisition had paid only ₹50 lakh of the ₹90.25 crore the latter owed to the Congress, hinting that the rest was possibly waived off by the party.

Others named in the case are Vora, Oscar Fernandez, journalist Suman Dubey and technocrat Sam Pitroda.

AJL shareholders cry foul play

AJL shareholders, the descendants of freedom fighters, including former law minister Shanti Bhusan and former high court chief justice Markandey Katju alleged that they had no clue neither were sent notice when Young India acquired AJL and that the shares held by their father were automatically transferred to AJL without their permission.

What’s the Congress’ defence?

The Congress says that the Young India was formed with the ‘aim of charity’ and not for profit and that its transactions were not financial but ‘commercial’ in nature.

Quick look at case timeline

On August 1 2014, ED took up the case to probe if any money laundering was involved in it.

On December 7, 2015, the Delhi High Court noted “criminal intent” and scrapped the appeals of the seven accused, asking them to appear in person before the trial court on December 9.

On February 12, 2016, the Supreme Court while granting exemption to the accused from personal appearance denied to quash proceedings against them.

In 2018, the Centre decided to end the perpetual lease and evict AJL from Herald House premises, arguing that it was no more involved in publication for which the building was leased to the company in 1962.

In April 2019, the Supreme Court, however ordered a stay on the proceedings against AJL under the Public Premises (Eviction Unauthorised Occupants) Act, 1971.

The same year, the ED permanently attached properties worth ₹64 crore in the case.

In May 2020, the ED attached a nine-storey building valued at ₹16.38 crore in Mumbai linked to the case.

The agency alleges that the accused including former Haryana Chief Minister Bhupinder Singh Hooda and Congress Motilal Vora, used ‘proceeds of the crime’ – land allotted to AJL in Haryana – and mortgaged it with Syndicate Bank’s Delhi branch for a loan to construct the building.

In February 2021, Swamy approached the Delhi High Court against a trial court’s scrapping of his plea to lead evidence to prosecute the accused in the case.

In April 2022, senior Congress leader Mallikarjun Kharge recorded his statement in a Prevention of Money Laundering case at the ED headquarters.

The same month the ED recorded the statement of Congress leader Pawan Kumar in a case involving AJL and Young India.