The New Delhi Metropolitan Magistrate Court on Thursday issued summons to Congress president Sonia Gandhi and vice-president Rahul Gandhi as accused in a criminal complaint lodged by BJP leader Subramanian Swamy for alleged cheating and misappropriation of funds in acquiring ownership of now-defunct daily National Herald.
Apart from Sonia and Rahul, the court also summoned Congress leaders Motilal Vora, Oscar Fernandez and Gandhi family’s trusted aides Suman Dubey and Sam Pitroda as accused of “grabbing properties worth Rs2,000 crore from the National Herald by dubiously floating” a private limited company called Young Indian. The accused have to appear before the court on August 7.
“From the complaint and the evidence so far, it appears that Young Indian was in fact created as a sham or cloak to convert public money to personal use or as a special purpose vehicle for acquiring control over Rs2,000 crore worth of assets of the Associated Journals ltd (publishers of National Herald newspaper) and since all the accused have allegedly acted in consortium with each other to achieve the said nefarious purpose/design, there are sufficient grounds for proceeding against all of them,” said the summon order issued by Metropolitan Magistrate Gomati Manocha. Sonia, Rahul and others were charged for criminal conspiracy, fraud, breach of public trust.
The Associated Journal, publishing company of National Herald newspaper was established by Jawaharlal Nehru in 1938. It is a public limited company having huge properties across the country like New Delhi, Mumbai, lucknow, Allahabad, Bhopal, Indore, Panchukula. In 2008, the newspaper was closed down.
In late 2010, Sonia and Rahul floated a private limited company called Young Indian and acquired the Associated Journals ltd. While Sonia and Rahul have 38 per cent shares each, Vora and Fernandez have 12 per cent stakes in the newly-floated company.
Dubey and Pitroda are also Directors of this controversial company. Meanwhile, the Congress gave Rs90 crore to The Associated Journal to settle its dues.
The controversy started when the Young Indian decided to own up Associated Journal’s liability to the Congress. Swamy challenged this in the Court accusing Sonia and Rahul for grabbing the assets of public limited company by floating the private company and using Congress party’s funds. As per Income Tax Act, political parties are debarred from funding business operations.
In November 2012 Swamy exposed the irregularity and went to Court on February 2013. After a year long arguments the Court had summoned Registrar of Companies to verify the documents of these companies submitted by Swamy.
“The aforesaid accused persons not only committed criminal breach of trust, but accused formed Young Indian Company to acquire the control over the assets of The Associated Journals… In effect the assets of The Associated Journals are virtually filling the personal kitties of the Directors of Young Indian who have themselves not substantially invested in The Associated Journal.
“There are situations where the court will and should lift the veil of incorporation in order to examine the realities which lied behind. Where a company has been formed to advance an illegal or fraudulent purpose the courts should refuse to uphold the separate existence of the company,” said the order making the new company Young Indian as also accused along with Congress leaders.
Now the options left before Sonia and Rahul is to either appear before the Magistrate Court and contest the accusations of Swamy or challenge the order of the court in Delhi High Court.