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National Herald Scam: Everything You Need To Know

A real life 'hera-pheri' done by top politicians of the Indian National Congress, as alleged by Subramanian Swamy

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National Herald was a newspaper, it's publishing rights were with AJL before Young Indian took over.
National Herald was a newspaper, it's publishing rights were with AJL before Young Indian took over.
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BY SHANTAM SAHAI

  • Indian National Congress lends Rs 90 crores to AJL, with no interest
  • AJL transfers all the shares with the Rs 90 crores debt to Young Indian, in return for Rs 50 lakhs
  • Subramanian Swamy files a private complaint in a court in Delhi, to uncover what is being investigated as the ‘National Herald Scam’

National Herald scam is a case that put the Indian National Congress under the public scanner, with Sonia Gandhi and Rahul Gandhi being in the spotlight, it involves other names such as Motilal Vora. All of it started on 1st November 2012 when BJP’s Subramanian Swamy filed a private complaint (a crusade against corruption) in a court in Delhi. He alleged criminal misappropriation by the Gandhis. According to Swamy, the Gandhis had committed fraud by illegally acquiring a public limited company, Associated Journals Limited (AJL) through Young Indian, a private limited owned by them.

The case came out as a conspiracy to amass wealth by exerting influence in the Indian National Congress and fooling the shareholders of AJL. Even though Rahul Gandhi called it a ‘political vendetta’, he surely didn’t expect Swamy would be able to connect all the dots and reach a conclusion of ‘why would the Congress party lend a loan of Rs 90 crore (with no interest) to AJL?’

ALSO READ: National Herald case: Sonia, Rahul may seek bail if needed

What is Associated Journals Limited (AJL)?

It is an unlisted public limited, incorporated on 20th November 1937. Its registered office is Herald House, 5-A, Bahadur Shah Zafar Marg, New Delhi. Even though it was an idea of Jawaharlal Nehru, he never owned AJL. It was started with the support of 5000 freedom fighters who became shareholders. AJL’s initial capital was Rs 5 lakh, which was divided into 2,000 preferential shares each worth Rs 100 and 30,000 equity shares worth Rs 10 each.

Motilal Vora (also the treasurer of the Indian National Congress) was the chairman and managing director of the company since 2002.  The company commanded publishing rights of the National Herald newspaper. It also owned various real estate properties which were estimated to be around Rs 5000 crore. AJL had incurred huge losses before it was transferred to Young Indian in 2011.

What is Young Indian?

It is a private limited which was incorporated on 23rd November 2010 with a capital of Rs 5 lakh. Its registered office too, was 5-A, Herald House, Bahadur Shah Zafar Marg, New Delhi. The company’s 76% shares are held by Sonia Gandhi and Rahul Gandhi (who are also in the board of directors), whereas the rest are held by Motilal Vora and Oscar Fernandes, another Congress leader.

The judicial process and investigation are still going on regarding the National Herald Scam. Pixabay
The judicial process and investigation are still going on regarding the National Herald Scam. Pixabay

How was AJL transferred to Young Indian?

  1. The Indian National Congress provided AJL with an unsecured zero interest loan of Rs 90 crores. Remember, the treasurer of INA and chairman of AJL are both the same person, Motilal Vora.
  2. In December 2010, the Board of Directors of Young Indian formally passed a resolution offering to own the outstanding debt of AJL of Rs 90 crores. This offer was accepted by the Chairman and Board of AJL.
  3. The AJL thereafter held a meeting of their Board and without reference to the Shareholders resolved that in lieu of Young Indian owing the debt and for a further consideration of Rs 50 Lakhs, the entire share equity of AJL would be transferred to Young Indian. Thus, AJL became a wholly owned company of Young Indian.
  4. The Indian National Congress wrote off the loan as irrecoverable by falsely holding that the Net Worth of the Company is negative.

Important Points

  • The Memorandum of Association of the AJL bars the Company from entering into any transaction which is not for furthering its objective to publish newspapers.
  • National Herald House is a prime property in Bahadur Shah Zafar Marg and was given by the Government for the purpose of publishing a newspaper at concessional rates. However, the Young Indian, now the owner of the National Herald House, has opened this property for commercial renting such as to Multinational Companies and to the Ministry of External Affairs for its Passport Seva Kendra on rent.

Important Questions

  • Why should Young Indian, which is majorly owned by the Gandhis, be assigned the AJL’s debt of Rs 90 crore that was gonna be written off by the INA?
  • Why didn’t AJL, which owns several real estate properties, use a part of its prime assets to repay the debt?

ALSO READ: Ruckus in Rajya Sabha over National Herald case

What do the shareholders say?

A number of shareholders have claimed that AJL’s chairman, Motilal Vora, and its directors did not inform them or obtain their approval while deciding to transfer its entire equity to Young Indian in December 2010.

“This is the first time I am hearing about such a company in which my grandfather had shared. I have no idea what kind of deal was struck. Had a letter or a notice for approval been sent to any of my siblings or at our Allahabad address, I would have been informed,” said former Supreme Court Judge Markandey Katju, whose grandfather Kailash Nath Katju held 131 shares in AJL.

Legality

As alleged by Subramanian Swamy, it is illegal for a political party to lend money for commercial purposes as per Section 29A to C of the Representation of the People Act, and Section 13A of Income-tax Act.

“According to the evidence so far, it appears that YIL was in fact created as a sham or a cloak to convert public money to personal use to acquire control over ₹20 billion worth of AJL assets,” said Metropolitan Magistrate Ms Gomati Manocha in 2014. The court had noted that all the accused, allegedly, had acted “in consortium with each other to achieve the said nefarious purpose/design”.

The National Herald case is currently an ongoing one, with the accused being charged under Sections 403, 406 and 420 read with Section 120-B of IPC.

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Awakened to The Congress’s Blatant Support to Anti-Nation Forces

This time from foreign soil, Germany, Rahul Gandhi has spoken out his mind

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Rahul Gandhi
Rahul Gandhi.

By Salil Gewali

Sometimes I feel too confused that what makes a leader speak so badly about the country. Still more confusing is that the same leader is projected as the only fittest in the country to be the Prime Minister.

This time from foreign soil, Germany, Rahul Gandhi has spoken out his mind. With gay abandon he claimed the lack of employment is the cause behind the rise of ISIS. If we analyze such statement objectively, we see that the unprecedented danger is looming large around this country not because of the citizens but because of the irresponsible leaders.

Is it not too shocking that we tolerate a bunch of leaders all through who, with impunity, tramples upon prudence and embrace the fickleness by speaking with such rashness? The ridiculous ranting is what Rahul Gandhi is good at. How many immature gaffes he has committed in last one year. One finds it too sickening to see people defending what Rahul utters out? Again, to his party’s sycophants, each word spoken out by him is worth its weight in gold.

Could any conscious people come across the board to evaluate what will be the likely repercussion when the projected leader goes to the extent to connect the unemployment of youth with ISIS? What do you say — if a certain father harps on that his children will be dagger-wielding murderers if they will not get jobs? What message does it send out? Will such ideas not “viciously affect” the thought process of the children in future? One wonders how the constitution allows the leaders to speak out such dangerous language. Will it not encourage the treasonous activities within the country leading to the decline of the security and sovereignty of the nation?

Rahul Gandhi
Rahul Gandhi.

Despite the height of stupidity, Rahul Gandhi is capable to earn more admirers then criticizers. Is it a pointer to the fact that one man’s loss of sense should lead to the “loss of sense” of other intellectuals? Or do we love an “individual” from a particular family more than our own “country”? On what ground is an “individual” more respect-worthy than the “party”, country and its constitutional ethos? This is in fact a very ominous trend which this country is witnessing now.

True, our Indian polity needs a strong opposition. People do not disagree at all that Congress should not be the one. Yes, this party can alone match well with the rival BJP. But sadly, the party is failing when Rahul started to become more vocal. The party with so smaller number of MPs has not yet “acknowledged” that its rapid decline now is because it continues to sing a hymn to one family only. The conscious Congress party leaders should come down to the ground and critically assess the people’s opinions and their concerns. They all have been intensely disillusioned by the dynasty politics.

Has this “family” not pleasantly ignored a very learned and seasoned leader Pranab Mukherjee by reducing him to just a rubber stamp?  Are Sachin Pilot, Ghulam Nabi Azad, C. P. Joshi, Ashok Gehlot, Jyotiraditya, Scindia, Priya Dutt, less Indian? If BJP can groom Kiren Rijiju why can’t Congress groom the astute leader of the northeast like Gaurav Gogoi or Vincent Pala or Mukul Sangma ? No exaggeration, Sachin Pilot could diplomatically handle the political situation and articulate the party policies far more maturely than entire Gandhi family members put together.

Enough is enough. People now anxiously await the REVIVAL of political parties with vibrant faces who genuinely love the country. We have seen enough of the anti-nation activities incited by the Gandhi family.  It’s totally wrong to be the puppets of a wrong family and spell doom for the nation. PM Modi rightly says that service to the country is far more important than the service to the family.

Salil Gewali is a well-known writer and author of ‘Great minds on India’. Twitter: @SGewali.

One response to “Awakened to The Congress’s Blatant Support to Anti-Nation Forces”

  1. During the UPA/Congress government there had been numerous terrorist attacks, Mumbai trains, Zaveri Bazar, 26-11, plus the attacks in Ahmedabad, Pune etc. Was this situation because the terrorists could not find jobs during their rule? Compared to that there are very few terrorist attacks in India in last four years. So the terrorists must be gainfully employed in last four years !