How Subramanian Swamy has got the Gandhis and Congress on the defensive in the National Herald case
The decision by Associated Journals Ltd (AJL) to become a non-profit company and restart the defunct National Herald newspaper is a post facto attempt to rationalise the questionable takeover of the company by Young Indian Ltd (YIL), a non-profit owned by the mother-son duo of Sonia and Rahul Gandhi. The takeover was financed with the help of a Rs 90 crore loan from the Congress party, of which Sonia is boss. In other words, Sonia’s party gave her company a loan to buy property-studded AJL for a song.
The decision to convert AJL into a non-profit was taken at an extraordinary general meeting of AJL shareholders earlier this week. This is nothing but an attempt to pull wool over everybody’s eyes because the case currently in court, in which Sonia and Rahul are the accused, is about them appropriating properties worth crores owned by AJL in an illegal way.
The reason why AJL is now being sought to be made a non-profit is obvious: as long as it was a regular company and Sonia and Rahul indirectly owned it through Young Indian, nobody would have believed that the takeover was anything other than an attempt to take over property worth crores through the backdoor (the property of AJL is valued anywhere between Rs 2,000-5,000 crore, and includes Herald House in Delhi’s Fleet Street, Bahadurshah Zafar Marg).
The announcement that National Herald would be revived is also part of this same strategy of pretending that this had been the plan all along. Who, after all, would think that the revival of a dead newspaper, started by Jawaharlal Nehru, is an unworthy goal for the Gandhis?
However, this too was an after-thought. For when, in 2012, the office of Rahul Gandhi was asked whether there would be an attempt to revive National Herald through Young Indian, it was categorical in its denial.
According to a story in The Pioneer, which ran the original story on this, an email from Rahul Gandhi’s Office had this to say:
“Young Indian is a company registered and holding a licence granted under Section 25 of the Companies Act, 1956. As a Section 25 company, Young Indian, is a not-for-profit company and does not have commercial operations. The activities of the company are in the public domain. Anyone who chooses to can inspect the Objects of the Company. The company has no intention of starting any newspaper.”
So why take over a company that was explicitly into newspapers, if it was not for the properties it held?
It is likely that Subramanian Swamy’s legal challenge of Young Indian’s takeover of AJL, now being heard by a Delhi trial court, is forcing their hand.
Soon after Swamy disclosed the caper, the Congress party, after much huffing and puffing, said that it had indeed lent money to the party president, and this was done with the noble idea of initiating a “process to bring the newspaper back to health” and that the loan was interest-free. The Congress made no profit from it. (Read the Congress statement here)
The party had to make this statement as it is not allowed to indulge in commercial activity. Hence the emphasis on having given an interest-free loan to Young India. But the loose end left behind was that AJL itself was a commercial enterprise, even if defunct at the time of the Gandhi takeover. This is what is being corrected now.
However, post facto decisions to convert AJL into a non-profit should not normally save the Gandhis from the law, for they were clearly using Congress party money to buy a regular for-profit commercial enterprise, including one with crores worth of property, at the time of the takeover.
But this fig-leaf will at least given them the right to pretend that this was the intention all along, and that at best they may have breached the letter of the law unintentionally. They will be hoping for a judge who is willing to see this as minor transgressions of the law when the Gandhis had such noble objectives all along!
But one should not also take AJL Chairman Motilal Vora’s claim that National Herald will be revived. The Indian Express quoted him as saying: “We are seriously relaunching the newspapers,”
For a takeover that happened five years ago, for Vora to claim that he is still “considering” the relaunch of the newspaper, whose employees have already been given handshakes and retrenched, is a bit rich. Anyone can guess why revival has become so important now. His bosses are in trouble.
Clearly, Subramanian Swamy has got The Dynasty on the defensive.
Jagannathan is Editorial Director, Swarajya. He tweets at @TheJaggi.
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