The Enforcement Directorate (ED) has filed a chargesheet against Congress leaders Sonia Gandhi, Rahul Gandhi, and several others in connection with the National Herald case, reviving a legal battle that has dogged the top brass of the grand old party for nearly a decade. The chargesheet also names Congress leader Sam Pitroda and Suman Dubey as accused persons.
What is National Herald case?
The ED case is based on a trial court order that allowed the Income Tax Department to probe the affairs of National Herald newspaper and conduct a tax assessment of Sonia and Rahul Gandhi. The order was the result of a petition filed by BJP leader Subramanian Swamy in 2013.
Swamy’s complaint also contained allegations of cheating and misappropriation of funds relating to the Gandhis’ acquisition of the newspaper. Swami had alleged that the Gandhis purportedly purchased the properties belonging to National Herald by purchasing the publishers of the newspaper, The Associated Journals Limited (AJL), through a company called Young Indian (YI) in which they control 86 percent shares.
The trial court released Sonia and Rahul on bail in this matter on December 19, 2015. In Swamy’s complaint to the trial court, Sonia, Rahul and others are charged with the crime of misappropriation by financing with YI the right to recover 90.25 crore rupees of debt that AJL owed the Congress for 50 lakh rupees.
What is Associated Journals Ltd (AJL)?
AJL is a public limited company incorporated in 1937 under the Companies Act. Though its primary purpose was to publish newspapers, over time it accumulated valuable real estate assets in Delhi, Lucknow, Mumbai, Patna, Panchkula and other cities.
In 2008, AJL stopped publishing its newspapers, citing lack of financial viability. However, its assets remained intact. What followed was a series of transactions that led to its control being transferred to a newly created entity — Young Indian Limited (YIL) — a move that is now at the centre of the ED’s money laundering case.
What is Young India Ltd (YIL)?
Young Indian Limited was incorporated in November 2010 as a not-for-profit company under Section 25 of the Companies Act. Its declared aim was to promote social objectives.
However, its ownership raised eyebrows — Sonia Gandhi and Rahul Gandhi each held a 38% stake, while senior Congress leaders like Motilal Vora and Oscar Fernandes held the remaining shares.
In December 2010, YIL acquired 99% of AJL’s shares, effectively taking over the company and its real estate holdings.
The role of Gandhis
The National Herald newspaper, originally launched by Jawaharlal Nehru in 1938 to support India’s freedom movement. It was published by AJL.
The National Herald, along with its Hindi and Urdu sister publications (Navjeevan and Qaumi Awaz), ceased operations in 2008 due to financial losses. But while the newspapers became inactive, AJL — the parent company — continued to exist, and more crucially, retained ownership of real estate across India reportedly valued at over Rs 2,000 crore.
The Congress made a proposal to revive the newspaper and extended a Rs 90 crore interest-free loan from the party fund. In 2010, the Congress assigned the AJL debt to its newly founded YIL. Since AJL was unable to repay the loan, its entire shareholding was transferred to the Gandhi-owned YIL for a sum of Rs 50 lakh.
Effectively, this gave YIL — and the Gandhis — control over AJL’s assets, which were originally meant for journalistic use.
Notably, on November 23, 2010, YIL was incorporated as a Section 25 company, with Gandhi family loyalists Suman Dubey and Satyan Gangaram (Sam) Pitroda as directors. The object of the company was stated to be: “To inculcate in the mind of India’s youth commitment to the ideal of a democratic and secular society…”
However, immediately after its incorporation, both the Directors transferred their shares to Congress leaders Oscar Fernandes, Sonia Gandhi, Rahul Gandhi and Moti Lal Vora (now deceased). Later, on December 13, 2010, Rahul Gandhi was appointed as Director of Young Indian and, on January 22, 2011, Sonia Gandhi joined the board as a Director.
As of March 2017, Sonia Gandhi and Rahul Gandhi had shareholdings of 38% each in the company. Vora and Fernandes held the remaining 24% in equal parts.
YI then registered itself under Section 12A of the Income Tax Act as a charitable organisation, making it eligible for 100% tax exemption.
Swamy and the ED argue that this was a deliberate and fraudulent takeover of public assets for private benefit, disguised under a non-profit setup.
ED charges
The ED has alleged that:
- The transfer of AJL shares to YIL was not for charitable purposes, but rather a strategic corporate move to gain control of prime real estate.
- The loan from the Congress to AJL was essentially a sham transaction to facilitate this takeover.
- Since YIL is not allowed to distribute profits, the ED argues that the true value lay in asset control — not dividends.
Congress leaders have dismissed the case as “politically motivated”, calling it an example of the BJP government’s “misuse of central agencies” to target the opposition.
Their defense hinges on the following points:
- YIL is a not-for-profit entity; therefore, no individual could benefit financially from the transfer.
- The ₹90 crore loan was used solely for clearing AJL’s liabilities.
- The goal was to revive the National Herald and safeguard its legacy — not profit from real estate.
- They argue that the entire transaction was above board and aimed at preserving a national institution, not enriching any individual.
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