National Herald case: Sonia Gandhi unable to explain AJL takeover by Young Indian, tells ED Vora overlooked transactions

The Enforcement Directorate on Tuesday questioned Congress president Sonia Gandhi for the second time in six days in the National Herald newspaper-linked monkey laundering case.

After being questioned for six hours, Gandhi was asked to appear before the agency for the third round of questioning on Wednesday.

During Tuesday’s questioning when her statement was recorded, Sonia Gandhi’s response was sought to a set of around 30 questions pertaining to her involvement with the National Herald newspaper and Young Indian Pvt Ltd, the company under scanner in the case, officials said.

Sonia Gandhi expressed her inability to explain the transactions that facilitated the takeover the assets of Associated Journals Limited (AJL), the publisher of National Herald, by Young Indian in which she and her son Rahul Gandhi hold a controlling stake, reported Times of India.

Sonia told the agency that Motilal Vora, the later former party treasurer, only knew about the details of the transactions between Congress, AJL and Young Indian, according to ED sources quoted by Times of India.

The Congress has been claiming it gave a loan of Rs 90 crore to AJL, the publisher of National Herald newspaper, over a period of time and to offset it, the AJL converted its debt into equity and sold it to Young Indian, owned by the Gandhis. However, no Congress leader questioned by the ED has been able to provide evidence for the same, as per ED sources.

Earlier, Rahul and other Congress leaders, including Mallikarjun Kharge and Pawan Kumar Bansal, had taken an identical stand when questioned by the central agency.

The loan by the All India Congress Committee (AICC) to the AJL is also being questioned as a political party is not allowed to give loans under the Representation of the People Act.

This issue had also been deliberated upon during investigations by the Income Tax department. The I-T Department had in its report called payments claimed by the Congress as “alleged loan” as there was no evidence of any payment.

The ED has also rejected Congress’ defence that Young Indian was a non-profit organisation and so there was no question of making money and laundering money.

The move to question the Gandhis was initiated after the ED late last year registered a fresh case under criminal provisions of the Prevention of Money Laundering Act(PMLA).

This was after a trial court here took cognisance of an Income Tax department probe against Young Indian based on a private criminal complaint by BJP MP Subramanian Swamy in 2013.

Sonia and Rahul Gandhi are among the promoters and majority shareholders in Young Indian. Like her son, the Congress president too has 38 per cent shareholding.

Swamy had accused the Gandhis and others of conspiring to cheat and misappropriate funds, with Young Indian paying only Rs 50 lakh to obtain the right to recover Rs 90.25 crore that Associate Journals Limited owed to the Congress.

In February last year, the Delhi High Court issued a notice to the Gandhis seeking their response to Swamy’s plea.

Congress leaders Mallikarjun Kharge and Pawan Bansal were questioned by the ED in the case in April.

The Congress has maintained there has been no wrongdoing and Young Indian is a “not-for-profit” company established under section 25 of the Companies Act and hence there can be no question of money laundering.

It is understood that Rahul Gandhi, during his deposition before the ED, stuck to the position that there was no personal acquisition of assets by himself or his family.

According to the ED, assets worth about Rs 800 crore are “owned” by the AJL and the agency wants to know from the Gandhis how a not-for-profit company like Young Indian was undertaking commercial activities of renting out its land and building assets.