Sonia Gandhi, Rahul Gandhi and an assorted group of Congress leaders associated with National Herald will have a lot of explaining to do as the case progresses in a court in Delhi. There could be fresh twists as more facts emerge
The National Herald case is showing every indication of turning into a nightmare for the Congress, especially its senior leadership including party president Sonia Gandhi and vice president Rahul Gandhi. Earlier efforts by the Congress to dismiss the issue as a canard and an unsubstantiated taint by the irrepressible Subramanian Swamy, have not worked. Despite their best attempts at nipping the problem in the bud, the matter has reached the Trial Court and hearing has begun. All that Sonia Gandhi and Rahul Gandhi have gained so far is exemption from personal appearance in the court (and for that too, they had to go to the Supreme Court). They failed in their attempt to get the case quashed. The next hearing is on Monday.
The latest headache for the Nehru-Gandhis and the Congress in general is that the Trial Court has summoned, on Swamy’s plea, accounts of the party as well as that of Associated Journals limited (National Herald’s publishing company) for the year 2010-11. The accounts are critical to the case because it was during this period that Congress leaders had floated Young Indian, which eventually acquired Associate Journals limited in a controversial deal that is under the scanner. But before that, other mysterious things happened. In an attempt to keep the ailing AJl alive, the Congress gave it unsecured interest-free loans for a few years, right up to 2010. By that year-end, the firm’s unsecured debt stood at close to Rs90 crore. Then came along Young Indian in 2010, and Sonia and Rahul Gandhi joined the board of directors with 76 per cent share control. The All India Congress Committee, which had rights over National Herald, decided to assign the AJl debt to the new company, thereby making Young Indian the new owner of AJl and, thereby of the defunct National Herald. Various points are being contested in the courts, including the nature of the buy-out and the legality of using party funds for private business.
But this is not the petitioner’s first success in getting crucial recorded material before the court. Months ago, Swamy had piled up woes on the Congress by obtaining an order from the Trial Court to summon documents pertaining to the case from as many as six Government agencies: Income Tax Department, Enforcement Directorate, Ministry of Finance, Registrar of Companies and the Urban Development Ministry and its land & Development Office. The last named is especially significant because allegations have been floating that Congress leaders connived to own Associated Journals limited to get hold of the enormous and expensive real estate the company was sitting on, across the country. Indeed, Swamy has been arguing that the real reason for the buy-out deal had nothing to do with the Congress’s affinity with National Herald; the party and its top leadership wanted to lay their hands on the properties (worth, some say, more than Rs2,000 crore) the firm owned. That, of, course, is as yet, an allegation.
But from all accounts, the financial transaction and the speculated motive behind it are causing great discomfort to Sonia and Rahul Gandhi and keeping the party on tenterhooks. The battery of high-profile lawyers representing them — many, like Kapil Sibal and Abhishek Manu Singhvi, been drafted for duty from within Congress ranks — have had a difficult time trying to mitigate the embarrassment to the party and its senior-most leadership. There have been many such instances, with the following two serving as examples: When the Delhi High Court upheld the summons issued to the mother-son duo for personal appearance, and even passed strong observations (which the apex court later expunged); and when the Supreme Court refused to dismiss the case, saying, “let there be a fair trial”.
Now the fresh round of worry for the Congress and its top brass is Swamy’s strategy to officially involve Government agencies into the case on legal grounds. Until now, while the Bharatiya Janata Party has been questioning the National Herald deal, the Government it leads has taken the position that the matter is between the Congress and Swamy. While it’s true that some Government agencies have been looking into the matter, there had not been any calibrated inquiry involving relevant Government departments. Now, the Income Tax Department, the Enforcement Directorate, the Union Ministry of Finance, the Registrar of Companies and the Urban Development Ministry, will all be part of the ongoing hearing in the court. There is a possibility that a coordinated approach can bring more skeletons tumbling out of the Congress’s National Herald cupboard.
Much as the lawyers and the well-wishers of the Congress want, the case is unlikely to die out anytime soon in the court. Swamy is a man possessed when he tastes blood. He will not let the issue slip out of his hands, regardless of whether he gets support from the Government or not. His campaigns against the 2G Spectrum scam, in favour of Ram Sethu and against the Sethusamudram project that sought to destroy Ram Sethu, indicate his doggedness. There could be another fall-out in case the petitioner continues to be on a roll: Government agencies such as the Serious Frauds Investigation Office and even the Central Bureau of Investigation may have to step in to unravel what appears, prima facie, to be at the very least an improper business deal, and worst an illegal take-over in complete violation of existing laws and with an intent to corner expensive real estate to be eventually managed by a handful of individuals in a political party.