‘Misuse of Cong funds for AJL takeover’ under ED’S scanner
NEW DELHI: As part of its money laundering probe against the Gandhi family, the Enforcement Directorate (ED) is looking into suspected misuse of Congress party funds to take over Associated Journals Ltd through Young Indian Private Limited (YI), which resulted in the acquisition of all immovable properties of AJL as well.
The allegations were first levelled by BJP leader Subramanian Swamy, who filed a private complaint in November 2012 in a court in Delhi claiming that the Gandhis had committed fraud and misused party funds to purchase the company that ran National Herald newspaper.
Swamy claimed that by acquiring AJL through a new company, Young Indian, Gandhis had also acquired properties worth several hundred crores owned by AJL in cities such as Mumbai, Lucknow, Patna, Panchkula and Delhi, including the six-storey Herald House at Bahadur Shah Zafar Marg. The Congress has repeatedly denied all wrongdoing and argued that the plea by Swamy was “misconceived and premature” because no agency had unearthed any proof of illegality. The party says that the ED investigation was a political ploy to target the Gandhis and part of the government’s political vendetta against the Opposition party.
AJL was incorporated in 1937 by former Prime Minister Jawaharlal Nehru. The company published English daily National Herald, Urdu publication Quami Awaz and Hindi language Navjivan.
However, due to financial difficulties, it stopped publishing newspapers in 2008. The All India Congress Committee (AICC) advanced loans worth ₹90.21 crore to AJL over a period of time.
Young Indian was formed in November 2010 with Gandhi family loyalists Sam Pitroda and Suman Dubey as its founding directors. Rahul and Sonia Gandhi are majority ( 76%) shareholders in the company with equal share while the late Oscar Fernandes and Motilal Vora owned remaining shares.
Meanwhile, AJL’S registered office was shifted to Herald House in Delhi. Swamy’s allegation was that the ₹90.21 crore interest free loan, which AICC gave to AJL, was assigned to YI, 23 days after the new company was formed. The transaction value was ₹50 lakh. After the loan was assigned to YI, it was converted into equity on February 26, 2011 (even though YI was yet to pay ₹50 lakh to AICC), resulting in the company holding 99% of AJL’S shares.
The ED’S Prevention of Money Laundering Act (PMLA) investigation is to establish whether Gandhis are real beneficiaries of the transaction as they are major shareholders in YI.
“The transactions led to the takeover of AJL, which has several immovable assets worth hundreds of crores, by YI by making an investment of ₹50 lakh. Also, YI had no assets of its own except those transferred through a loan assigned by AICC,” said an officer, who didn’t want to be named.
Investigators also said that YI had no business or income.
An AJL property worth ₹16 crore has already been attached last year by the ED in Mumbai.