The Enforcement Directorate has summoned interim Congress president Sonia Gandhi and her son Rahul Gandhi in connection with a money laundering case related to National Herald. According to the ED probe, the NGO, controlled by the Gandhis, that started off with only Rs 5 lakh in 2010 now has assets over Rs 800 crores. At this time, a passport office works out of Herald House.
This story starts in 2008 when Associated Journals Ltd (AJL), the publisher of the National Herald was on the verge of becoming defunct. This was a time when AJL’s owners found an opportunity to discontinue the printing and publishing business. Instead, properties owned by AJL at prime locations in Delhi, Mumbai, Panchkula, Lucknow and Patna were rented out to meet the commercial viability of the company. Reportedly, these properties were pulled in during the Congress regime at meagre costs for the sole purpose of publishing. By now, AJL was only a publishing house in name, whereas the money was minted through renting out its precious properties in prime locations.
In November 2010, a new entity called ‘Young Indian’ entered the scene. As reported by The Times of India, the new company was formulated by Sonia Gandhi as the President of INC, senior Congress leader Oscar Fernandes and other close aides of the Gandhi family. To this date, Sonia Gandhi along with Rahul Gandhi and Priyanka Gandhi-Vadra continue to be the majority stakeholders in the company. The company was born to take over AJL as means to acquire the properties owned by the ailing company.
The ‘non-profit’ way of getting tax exemptions
While during its inception, Young Indian started off with Rs 5 lakh capital, and now has properties worth Rs 800 crore sprawling across the country. In 2017, the Income-tax department challenged the takeover of AJL by Young Indian. After going through the IT department’s charges, the file of I-T returns by Sonia Gandhi and Rahul Gandhi had again come into the scanner.
Young Indian caught the attention of the Income Tax Department after it was revealed that the organisation was listed as a Section-25 company. Such companies are exempted from paying taxes for being a charitable non-profit organisation. The company applied for IT exemption in March 2011 and the same was granted to the company on May 9, 2011. This was right under the behest of the Congress Party when the Manmohan Singh-led UPA government was in power.
Despite being listed as a non-profit company, the Young Indian started acquiring properties under the guise of being a publishing house. It also enjoys tax exemption from the year 2010-11. However, the company has been struggling to keep its leased properties, which have recently caught the ire of the ED. The Congress era saw many politicians, business tycoons and individuals with high net worth investing in prime properties by acquiring the company which owned the asset instead of directly purchasing the property. This gave them leverage to not get involved in paying the stamp duty and capital gain tax for the purchase.
Properties owned by Young Indian
Reportedly, Young Indian holds properties amounting worth Rs 800 crore which were acquired by the company during the UPA era at petty sums. This includes properties at prime locations in Delhi, Mumbai, Lucknow, Patna and across other cities in the country.
The Herald House, located on the Bahadur Shah Zafar Marg, was one of the first properties acquired by AJL. The building is currently rented out to the Government of India, which runs a Passport Seva Kendra on its premises. Currently evaluated worth hundreds of crores, the ministry of housing and urban development cancelled its lease deed citing a violation of the allotment clause.
Young India, which was listed as a non-profit company was found using the property for commercial gains by renting it out, instead of publishing newspapers. Writ petition submitted by the Gandhis against the Ministry of Housing order was dismissed by the Delhi High Court.
In 2019, the ED took possession of 65-acre land acquired by AJL in Panchkula after charges of money laundering were attracted on the Gandhis regarding possession of the property. The case of money laundering against the Gandhi family started after properties owned by AJL were transferred to Young Indian after its acquisition. The ED revealed the information about the land stating – Plot No C-17, Sector 6, Panchkula was allotted to AJL by then Haryana CM Bhupinder Singh Hooda for the first time in 1982.
The allotment was revoked 10 years later after the company was found using the land for commercial interests. However, the same piece of land was allotted to the company in 2005 for merely Rs 59,39 lakh.
Similarly in May 2020, The ED attached the assets of AJL in Bandra, Mumbai including a 9-storey building with 2 basements worth Rs 16.38 crores. The attachment order by the ED pertaining to an angle of money laundering was issued against the AJL & Moti Lal Vora who served as the Chairman-Cum-Managing Director in the company.