Explainer: What is National Herald case all about
On April 11, the Enforcement Directorate (ED) initiated proceedings to take possession of immovable assets worth Rs 661 crore linked to the Congress-controlled National Herald newspaper and the Associated Journals Limited (AJL).
Property registrars in Delhi, Mumbai and Lucknow were sent notices directing them to take over AJL assets under the Prevention of Money Laundering Act (PMLA). Notices were also posted at key AJL properties, including Herald House in Delhi and buildings in Mumbai and Lucknow.
The National Herald case revolves around the acquisition of properties worth over Rs 2,000 crore of AJL, the publisher of the National Herald newspaper, by a company called Young Indian Limited (YIL). This company is jointly owned by Congress leaders Sonia Gandhi and Rahul Gandhi, each holding 38 per cent of the shares.
The ED is investigating claims that AJL’s properties were acquired for just Rs 50 lakh, undervaluing their worth. Allegations also include the generation of bogus proceeds, such as fake donations and rent agreements worth crores, to launder money.
The ED had attached the properties in November 2023 as part of a wider probe into alleged money laundering involving the Congress leadership.
The ED investigation stems from a 2014 complaint by BJP leader and advocate Subramanian Swamy, which has been upheld by both the Delhi High Court and the Supreme Court.
Origin of the case
In 2012, Swamy filed a complaint before a trial court alleging that some Congress leaders were involved in cheating and breach of trust in the acquisition of AJL by YIL. He alleged that YIL had taken over the assets of National Herald in a “malicious” way.
Both Rahul and Sonia Gandhi have been summoned by the ED in the probe related to the National Herald case. The ED is currently probing the shareholding pattern, the financial transactions of AJL and YIL, and the role of party functionaries in the functioning of the two entities.
Many shareholders, including former Law minister Shanti Bhushan and former Chief Justice of Allahabad and Madras High Courts Markandey Katju, alleged that they were not served any notice when YIL “took over” AJL and that the shares held by their fathers were transferred in 2010 without their consent.
Political leaders named
Apart from Sonia and Rahul Gandhi, the late Motilal Vora, Oscar Fernandes (also deceased), journalist Suman Dubey and head of Overseas Congress Sam Pitroda have been named in the case.
Charges of profiteering
Swamy claims that YIL “took over” the assets of the defunct print media outlet in a “malicious” manner to gain profit and assets worth over Rs 2,000 crore.
He alleged that YIL paid just Rs 50 lakh to obtain the rights to recover Rs 90.25 crore which AJL owed the Congress; it was given the amount earlier as a loan to start the newspaper.
He also alleged that the loan given to AJL was “illegal” as it had been taken from party funds.
In 2014, the ED initiated a probe to see if there was any money laundering. On September 18, 2015, it was reported that the ED had reopened its investigation in the National Herald case.
The story so far
In 2015, the Supreme Court asked Swamy to make out a case for a speedy trial in the high court. Sonia and Rahul Gandhi were granted bail by the trial court on December 19, 2015. In 2016, the Supreme Court granted an exemption to the accused (the Gandhis, Motilal Vora, Oscar Fernandes and Suman Dubey) from personal appearances while refusing to quash proceedings against them.
In 2018, the Centre decided to end the 56-year-old perpetual lease and evict AJL from Herald House premises on the ground that the latter was not conducting any printing or publishing activity — the ostensible objective for which the building was allotted in 1962.
The L&DO wanted AJL to hand over possession by November 15, 2018. However, on April 5, 2019, the Supreme Court ordered a stay on proceedings against AJL until further notice.
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