What is National Herald Case
Dec 19th, 2015
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What is National Herald Case
New Delhi,19 December: On a complaint of BJP leader Subramanian Swamy
the court had summoned the Gandhis, Congress treasurer Motilal Vora,
general secretary Oscar Fernandes, journalist Suman Dubey and
technocrat Sam Pitroda. Congress president Sonia Gandhi and party vice
president Rahul Gandhi on Saturday appeared in the Patiala House Court
in the National Herald Case. What is the facts about this case?
1. In 1938 during the freedom struggle, Jawaharlal Nehru, who went on
to become independent India’s first prime minister, started the
National Herald newspaper.
2. The paper originally served as a mouthpiece of the Congress was
published by The Associated Journals Limited (AJL). However, over the
decades, circulation dropped and finances dried out, and it finally
closed in 2008 with a debt of Rs 90 crore.
3. In a bid to keep AJL afloat, the Congress party gave the company
unsecured, interest-free loans for some years up to 2010.
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4. On November 23, 2010, AJL was taken over by a newly-floated company
called Young Indian Private Limited (YIL) with Gandhi family loyalists
Suman Dubey and Sam Pitroda as directors.
5. The All India Congress Committee (AICC) decided to assign the
nearly Rs.90 crore debt it was owed by AJL to YIL, thus making it the
owner of the debt in the books.
6. In December 2010, AJL decided to transfer its entire equity to
Young Indian in lieu of YIL owning its Rs.90 crore debt. Young Indian
paid Rs.50 lakh for this acquisition.
7. AJL, which originally owed Rs.90 crore to the Congress party,
became a fully-owned subsidiary of Young Indian by virtue of this
decision and transaction.
8. In December 2010, Rahul Gandhi was appointed its director and in
January 2011, Sonia Gandhi also joined the board as a director.
Motilal Vora and Oscar Fernandes too were appointed to the Young
Indian board on the same day.
9. As per documents, Sonia Gandhi and Rahul Gandhi have individual
shareholdings of 38 percent each in the company while Vora and
Fernandes hold the remaining 24 percent in equal parts.
10. In 2012, Swamy filed a complaint before the trial court alleging
that Congress leaders were involved in cheating and breach of trust in
the acquisition of AJL by YIL.
11. The Gandhis and others will be tried on charges of dishonest
misappropriation of property (section 403 IPC), criminal breach of
trust (section 406), cheating (section 420) and criminal conspiracy
(section 120 B).
12. Swamy alleged that YIL had taken over over the assets of the
defunct outlet in a “malicious” manner to gain profit and assets worth
over Rs.2,000 crore.
13. Swamy alleged that YIL had paid just Rs.50 lakh to obtain the
right to recover Rs.90.25 crore that AJL had owed to the Congress
party, given earlier as a loan to start the newspaper.
14. Metropolitan magistrate Gomati Manocha, had issued summons to
Gandhis and other on June 26, 2014 and noted that all accused persons
had allegedly acted “in consortium with each other to achieve the said
nefarious purpose/design”. The court had asked all accused to appear
before it on August 7, 2014.
15. The Congress leaders on July 30, 2014 moved the high court, which
stayed the summons. On December 7, 2015 the high court dismissed the
appeals filed by the Congress leaders, observing that prima facie the
case “evidenced criminality”.
16. The high court also raised questions regarding the legality of the
initial loan granted to AJL by the Congress party.
17. Following the high court’s order, on December 8 the trial court
had directed them to appear on December 19.
18. A notice appeared in Lucknow-based newspapers of Friday giving
notice for an extraordinary general meeting of the AJL on January 21,
2016 to transform it into a not-for-profit company.
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