Anti-corruption body approves action by investigative agency against National Herald’s 7.52 billion assets

The National Herald is published by AJL and owned by Young Indian Private Limited (on behalf of)

New Delhi:

The PMLA adjudication body on Wednesday paved the way for the Enforcement Directorate to take over assets worth around Rs 752 crore of the Congress-driven National Herald newspaper as it upheld the freezing order issued last year on the properties.

The agency said in its order that it believes the personal property and equity seized by the Department of Education are proceeds of crime and related to money laundering crimes.

The agency can now own the assets such as the Pioneer Building of ITO in Delhi, land and buildings in Mumbai, Lucknow and a few other locations.

The assets can be finally confiscated once the court of first instance rules in favor of the prosecution (ED).

In November last year, the central agency issued interim attachment orders against Associated Journals Ltd. (AJL) and Young Indian (YI) under the Prevention of Money Laundering Act (PMLA) and attached the properties.

The National Herald is published by AJL and owned by Young Indian Private Limited. Congress leaders Sonia Gandhi and Rahul Gandhi are the major shareholders of Young Indian, with each holding 38% shares.

The Congress party later termed the agency’s actions as “petty vendetta tactics” and called the unit an “alliance partner” of the BJP.

The agency claimed in a statement that Congress shareholders and donors were “deceived” by AJL and party officials in this case.

The education ministry said in a statement that it had issued an order to temporarily attach properties worth Rs 751.9 crore.

Investigation revealed that Associated Journals Ltd. (AJL) has proceeds of crime amounting to Rs 661.69 crore from immovable properties spread across many Indian cities including Delhi, Mumbai and Lucknow, with Young Indian (YI) owning value in the form of investment in AJL equity Proceeds of crime of Rs 9,021 crore,” it said.

Gandhi family, Congress president Mallikarjun Kharge and party leader Pawan Bansal, DK Shivakumar (Deputy Chief Minister of Karnataka) and his MPs Brother DK Suresh was questioned and the agency recorded their statements in the case.

The money laundering case stems from a court order issued by the Delhi Metropolitan Magistrate on June 26, 2014, after a private complaint was filed against the National Herald regarding alleged irregularities.

The Court held that seven defendants and entities, including Young Indian, were “prima facie guilty” of criminal breach of trust under various provisions of the ICC, including deception and dishonest inducement to deliver property, dishonest misappropriation of property and criminal conspiracy. Conspiracy, the Ministry of Education said.

“The accused hatched a criminal conspiracy to acquire AJL properties worth hundreds of millions of rupees through the special purpose vehicle Young Indian. AJL acquired land at concessional prices in various cities in India for publishing newspapers,” the agency said.

AJL closed its publishing operations in 2008 and began “using” the properties for commercial purposes, it added.

AJL was allegedly required to repay a loan of Rs 90.21 crore to the All India Congress Committee (AICC), however, the AICC deemed the said loan of Rs 90.21 crore as irrecoverable by AJL and sold it to an Indian company for Rs 50 lakh . The newly formed company Young Indian had “no” source of income and could not even afford Rs 50 lakh.

“AJL’s shareholders and Congress Party donors were deceived by AJL and Congress Party officials,” the agency claimed.

After purchasing a loan of Rs 90.21 crore from AICC, Young Indian demanded either repayment of the loan or allotment of equity shares in AJL to it, the executive director said.

AJL held an extraordinary general meeting (EGM) and passed a resolution to increase its share capital and issue new shares worth Rs 9,021 crore to YI, it added.

The agency said: “Through this new allotment, the shareholding ratio of more than 1,000 shareholders has been reduced to only 1%, and AJL has become a subsidiary of YI. YI also controls the property of AJL.”

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)