Published: 02nd June 2022
#WhatTheFAQ: What is the National Herald case and how is the Gandhi family involved?
The case goes back to 2012 when Congress-owned Young India Ltd acquired Associated Journals Limited, which published the National Herald newspaper
The Gandhi family find themselves in a pickle. Yesterday, the Enforcement Directorate (ED) called upon Rahul Gandhi and Congress President Sonia Gandhi to take their statements in connection with the National Herald money laundering case. The criminal section under the Prevention of Money Laundering Act (PMLA) is what is under operation in the case. But what exactly transpired in the National Herald incident? It goes all the way back to 2012 so we jog your memory with this round up of #WhatTheFAQ.
What is the National Herald?
The National Herald is a newspaper that was started by Jawaharlal Nehru in 1938 and became a mouthpiece of the Indian National Congress. It was published by Associated Journals Limited (AJL).
How is the Congress party involved?
In 2012, BJP leader Subramanian Swamy claimed that Congress leaders were involved in the acquisition of AJL through Young India Pvt Ltd (YIL), a private company set up in 2010 of which Rahul Gandhi was the director. Swamy alleged that YIL gained control of National Herald's assets worth over Rs 2,000 crore. Moreover, the Congress had extended a Rs 90 crore interest-free loan from its party fund to revive the newspaper. In return, YIL paid just Rs 50 lakh to obtain the rights to recover the Rs 90 crore AJL owed the Congress, meaning that the party had written off the leftover Rs 89.5 crore. Swamy filed a complaint accusing Congress leaders of cheating and breach of trust in the acquisition of AJL by YIL. Under the Income Tax Act, no political organisation can have financial transactions with a third party.
Who have been accused in this case?
Late Congress leaders Motilal Vora and Oscar Fernandes, journalist Suman Dubey, ex-Haryana CM Bhupinder Singh Hooda and businessman Sam Pitroda have all been accused, in addition to Sonia and Rahul Gandhi.
What has been said by the courts?
In 2014, the metropolitan magistrate Gomati Manocha noted that the evidence did seem to point towards YIL being created as "a sham or a cloak" to flip public money into personal use. The court, however, added that it was only the summoning stage and the accused had the right to defend themselves against the allegations.
What does the Enforcement Directorate claim?
The probe has led the ED to claim that the accused utilised 'proceeds of crime' in the form of land illegally allotted to AJL in Panchkula, Haryana, and used that as collateral to procure a loan from a Delhi-based Syndicate Bank branch to construct a building in Bandra of Mumbai. This property, which was valued at Rs 16 crore, was attached by the ED in 2020.
What has the Congress party said?
The Congress has stood by its claim that the YIL was formed with the aim of charity and not for turning profits. Congress MP and senior lawyer Abhishek Manu Singhvi has said that there has been no transfer of property or cash so there can be no money laundering case in the first place.