The National Herald scam is one of the most infamous legal cases in Indian history. This high-strung drama witnessed Rahul Gandhi’s anticipated appearance at the ED amid Congress fanfare.
The Congress carried out a ‘satyagraha’ march to the office of the ED, and party leaders alleged that the current dispensation was indulging in ‘vendetta politics.’ Congress is in complete denial mode and protesting nationwide against the ED questioning Rahul Gandhi in the National Herald case.
Chronology of the National Herald Scam
The National Herald case involves three key players — Associated Journals Ltd, Young India Ltd, and Congress.
The National Herald newspaper was founded by Jawaharlal Nehru in 1938 in Lucknow as part of the independence movement against the British. The newspaper, published by Associated Journals Limited (AJL), became a mouthpiece of the Congress party after Independence.
When the National Herald suspended operations in 2008 due to heavy losses, it was estimated that the newspaper had properties worth Rs 2,000 crore in Delhi, Lucknow and Mumbai.
On December 16, 2010, the AICC transferred the entire outstanding loan of Rs 90.21 crore due from AJL in favour of the appellant company, Young Indian, for a consideration of Rs 50 lakh. Further, almost 99.99 per cent of shares of AJL were transferred to Young Indian.
Congress President Sonia Gandhi, who has also been summoned by the ED for questioning on June 23, 2022, and her son Rahul Gandhi together hold a 76% stake in the Young Indian. Of the remaining 24%, deceased Motilal Vora and another Congress loyalist Oscar Fernandes held 12% each.
BJP leader Subramanian Swamy filed the case against Gandhis in 2012, accusing them of misusing party funds to purchase a company that published the National Herald newspaper. On November 1, 2012, he filed a private complaint in a Delhi court, alleging that Sonia and Rahul Gandhi committed fraud and land grabbing worth thousands of crores.
He alleged that Young Indian Pvt Ltd (YIL) took over the assets of the National Herald, the defunct print media outlet, in a malicious manner to gain profit and assets worth Rs 2,000 crore.
The BJP leader also alleged that the loan given to AJL was illegal since it was taken from party funds. Under the Income Tax Act, no political outfit can have financial transactions with a third party.
Late Congress leaders Motilal Vora and Oscar Fernandes, journalist Suman Dubey and Sam Pitroda were also named in the case, apart from Sonia and Rahul Gandhi. Former Haryana CM Bhupinder Singh Hooda is also an accused in the money laundering case registered by the ED in the National Herald case.
Rahul Gandhi has washed his hands off from having any personal knowledge about the transactions which are being probed for money laundering.
Moreover, he has recently told the ED that former and deceased Congress treasurer Motilal Vora was responsible for all the transactions pertaining to the Young Indian’s acquisition of Associated Journals Ltd’s (AJL) assets worth hundreds of crores from Congress.
The ED did not grill Rahul Gandhi continuously for hours, as suggested and exaggerated by Congress workers. The reason the questioning was delayed was that, after every few hours, he kept reviewing his answers.
So effectively, they only managed six hours of questioning in three days of questioning. Rahul Gandhi has sought exemption from questioning on Thursday, and hence it shall now continue on Friday.
What Courts have said so far
In 2014, Metropolitan Magistrate Gomati Manocha summoned all the accused, including the Gandhis, in the case. The court said that from the complaint and the evidence so far, it appeared that YIL was created as a “sham or a cloak” to convert public money for personal use, according to reports.
The court said that the complainant had established a prima facie case against the accused under Section 403 (Dishonest Misappropriation of Property), Section 406 (Criminal Breach of Trust) and Section 420 (Cheating) read with Section 120B (Criminal Conspiracy) of the IPC.
The court, however, noted that this was only “the stage of summoning”, and the accused had the right to refute the allegations and defend themselves. In August 2014, the Delhi High Court stayed the summons. In December 2015, the Patiala house court granted bail to Sonia and Rahul Gandhi in the case.
In February 2016, the Supreme Court directed Sonia Gandhi, Rahul Gandhi and the other accused to face criminal proceedings in the case. However, the top court exempted the Gandhis from appearing in court personally as they were “prominent persons” and not a flight risk.
In 2019, the ED attached National Herald properties worth Rs 16.38 crore in Mumbai.
At present, the probe agency is investigating the shareholding pattern, financial transactions and role of the promoters YIL and AJL. The agency has also registered a fresh case under the criminal provisions of the Prevention of Money Laundering Act after a trial court took cognisance of an Income Tax Department probe against YIL on the basis of Swamy’s complaint.