National Herald case: Rahul, Sonia Gandhi charged with criminal conspiracy
What's the story
Senior Congress leaders Rahul Gandhi and Sonia Gandhi have been charged with criminal conspiracy in the National Herald money laundering case. The charges were filed in a new First Information Report (FIR) by the Economic Offences Wing of the Delhi Police, NDTV reported. The FIR also names Sam Pitroda, Suman Dubey, Sunil Bhandari, and an unidentified person, along with three companies, namely, Associated Journals Limited (AJL), Young Indian, and Dotex Merchandise Private Limited.
Fraud claims
Allegations of fraudulent takeover in National Herald case
The FIR alleges a criminal conspiracy to "fraudulently take over" AJL, the parent company of the now-defunct National Herald newspaper. Dotex Merchandise, a Kolkata-based shell company, allegedly gave ₹1 crore to Young Indian. The not-for-profit company is said to be controlled by the Gandhis with a 76% shareholding stake. Through this transaction, it is alleged that Young Indian paid ₹50 lakh to Congress and took control of AJL, which had assets worth around ₹2,000 crore.
ED complaint
FIR based on Enforcement Directorate's complaint
The FIR, dated October 3, is based on a complaint from the Enforcement Directorate (ED). The ED has submitted its investigation report to the Delhi Police. Under Section 66(2) of the Prevention of Money Laundering Act (PMLA), the ED can direct any agency to register and investigate a scheduled offence. The FIR was filed shortly before a Delhi court deferred its decision in the National Herald case to December 16.
Case history
Background of National Herald case
The National Herald case dates back to 2012, when Bharatiya Janata Party (BJP) leader Subramanian Swamy filed a case alleging Congress leaders' involvement in cheating and breach of trust. The Associated Journals Limited published the National Herald, founded by Jawaharlal Nehru and other freedom fighters in 1938. The newspaper ceased publication in 2008 due to financial difficulties, leaving an unpaid debt of ₹90 crore.
Financial aid
Congress party's role in National Herald's financial crisis
To help AJL, the Congress party gave a loan of ₹90 crore over 10 years in about 100 instalments. However, neither National Herald nor AJL could repay the loan, and it was converted into equity shares. Since parties cannot own equity shares, they were allotted to Young Indian, a not-for-profit company incorporated in 2010. The Gandhis own 38% shares each in Young Indian, with the remaining shares held by Motilal Vora, Oscar Fernandes, Sam Pitroda, and Suman Dubey.