AJL: ED says Sonia, Rahul Gandhi got Rs 142 crore in 'proceeds of crime' in National Herald case

NEW DELHI: Enforcement Directorate on Wednesday told a special court here that Congress veteran Sonia Gandhi and her son Rahul received Rs 142 crore in "proceeds of crime" after acquiring Associated Journals Ltd (AJL) through Young Indian, a company in which they together held 76% stakes.

The agency told the court of special judge Vishal Gogne that a 'prima facie' case of money laundering was established against Sonia, Rahul and others in the case involving the acquisition of AJL - publisher of Congress mouthpieces National Herald and Qaumi Awaz - by Young Indian. The court will continue hearing arguments in the case on a day-to-day basis from July 2-8.

In its prosecution complaint (chargesheet), ED has made Sonia and Rahul accused No. 1 and No. 2, respectively, besides naming five others, including close associates Sam Pitroda and Suman Dubey.

ED: Gandhis gained from Herald scam, Cong & its donors are victims
ED's case is based on the charge that Congress provided an interest-free loan of Rs 90 crore to AJL, which owns significant real estate in different parts of the country. When AJL failed to repay, Congress, then led by Sonia, transferred AJL to Young Indian, a newly promoted "not-for-profit" in which she was a director along with Rahul, and they together held 76% stakes.

As a result, Young Indian ended up controlling assets worth Rs 752 crore, mostly in the form of buildings or land in Delhi, Mumbai, Lucknow, Indore, Chandigarh and Patna, allotted to AJL by Congress govts for bringing out National Herald and other party journals.

ED has also alleged that Young Indian paid Rs 50 lakh - arranged through a Kolkata-based shell company Dotex Merchandise Pvt Ltd - to repay AJL's Rs 90-crore loan to Congress as full and final settlement. The company is one of the seven accused named in the chargesheet, which was filed before the court on April 9. Young Indian was launched in Nov 2010, with Dubey and Pitroda as directors and a paid-up capital of Rs 5 lakh, according to the chargesheet. By early next year, they had transferred their shares to the Gandhis, clearing the way for them to acquire assets, and going by an assessment done by the Income Tax department, these were worth Rs 752 crore. The current market value of the assets is worth Rs 2,000 crore, according to the ED chargesheet.

Appearing for ED, additional solicitor general S V Raju told the court that the Gandhis and other accused were enjoying proceeds of crime of Rs 142 crore until the ED attached these (AJL) properties (worth Rs 752 crore in Nov 2023).

As Raju and advocate Zoheb Hossain, special counsel for ED, pressed the court to take cognisance of the chargesheet, senior advocate Abhishek Manu Singhvi, appearing for Gandhis, sought time until July on grounds that voluminous records and documents needed scrutiny. The court allowed ED to proceed with its opening arguments, despite Singhvi's objection.

The hearing took an interesting turn when Raju suggested Congress and those who made donations to it were also victims of the alleged scam. He argued that while it was Congress that loaned Rs 90 crore to AJL, assets of the company were transferred to Gandhi-controlled Young Indian and not the party - an interesting line of reasoning which in the coming days may develop into a larger argument about Sonia and Rahul allegedly benefiting at the expense of Congress members as well as its donors.

Meanwhile, the court directed ED to provide a copy of its chargesheet in the matter to Subramanian Swamy, based on whose private complaint the agency had lodged the present money laundering case.

During the hearing, Raju and Hossain focused on the generation of proceeds of crime, which, Hossain said, not only included those properties obtained from the scheduled offence but also other activity such as getting 'donations' and 'bogus' rentals.

"Rental income worth Rs 142 crore received by the accused will be included in this," Hossain said. He submitted that the matter pertains to criminal conspiracy allegedly involving three entities - AJL, Young Indian and Congress.

On Sonia and Rahul becoming shareholders of Young Indian, the judge asked, "The underlying allegation is ownership, is implicitly transferred to the first two accused, so who owns the properties as of date, Young Indian or AJL?... In very simple words, if property of 'A' is usurped by 'B', does it become proceeds of crime in the hands of 'B'?"

The judge also asked if there is a forensic auditor with ED and said he wants to understand exactly how companies work and in what ways they are allowed to issue shares. Responding to the query, Hossain said he will get back with answers. He added, "Whenever there is a fraud, then the court will probe into who are the real beneficial owners, which PMLA enables the court to do."