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National Herald Case
ET- 14 Dec, 2015,
How much were Associated Journals' seven properties worth?
NEW DELHI | MUMBAI: Amid the controversy raging over ownership of
Associated Journals Ltd, the company that owns National Herald,
Navjeevan and Qaumi Awaz newspapers, estimates of the company's
prime properties ranging from Rs 2,000 crore to Rs 5,000 crore have been
doing the rounds.
Get a realistic valuation of the seven properties located in Delhi, Mumbai,
Lucknow, Patna, Indore, Bhopal and Panchkula. Several property brokers
and top real estate consultants help estimate in these cities.
Experts pegged value of these properties at about Rs 1,150 crore, as per
conservative estimates.
Controversy erupted after BJP leader Subramanian Swamy alleged
irregularities in the acquisition of Associated Journals Ltd by Young Indian
Ltd, a section 25 nonprofit private company. Delhi High Court in a recent
order dismissed a plea by Congress president Sonia Gandhi and Vice-
president Rahul Gandhi to quash summons issued against them by a trial
court.
They now have to appear before the court on December 19. Swamy
has said that the Gandhis hold 76 per cent stake in Young Indian.
All seven of the company's properties are located in prime locations.
The biggest among these in terms of both value and size is the one on
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Bahadurshah Zafar Marg in Delhi, with 100,000 sq ft of built-up space
spread over five floors. According to conservative estimates by real estate
experts, this property may well be worth Rs 300-400 crore.
Two floors in the building are leased to the ministry of external affairs,
which has been running the Passport Seva Kendra since 2012. Two floors
are occupied by TCS to process passport applications. The top floor has
been kept empty for use by Young Indian. The building currently generates
about Rs 7 crore as rent every year.
While the Delhi edition of National Herald started from this building in
1968, the paper was established by Jawaharlal Nehru in Lucknow way
back in 1938.
The property in Lucknow, in the historic Kaiserbagh area of the city,
used to publish three newspapers - National Herald in English, Navjeevan
in Hindi and Qaumi Awaz in Urdu. The two-acre property has two buildings,
Nehru Bhawan and Nehru Manzil, which are spread over 35,000 sq ft. One
part today houses the Indira Gandhi Eye Hospital and Research Centre,
run by the Rajiv Gandhi Charitable Trust. The property originally had
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Church Mission Birkett High School on it before Associated Journals
acquired it.
A property broker said this is the heart of Lucknow, with Bahujan
Samaj Party chief Mayawati's property next to it. K Vikram Rao, president
of Indian Federation of Working Journalist, senior journalist and son of K
Rama Rao, the first editor of National Herald, said plots were given by
Congress governments for the purpose of running newspapers, at
throwaway prices and now their market value is much higher. The three
newspapers that Associated Journals ran shut down in 1999 after facing
troubles for almost a decade.
Some properties, however, were never used for the intended
purpose. In Mumbai, the paper had been given a 3,478 sq metre plot in
Bandra along the Western Express Highway. This is a large plot by
Mumbai standards. This land was given in 1983 for publishing a daily
newspaper and to set up the Nehru Library and Research Centre.
Instead, an 11-storey commercial office building stands constructed
on the plot. "As per rules, the work on the said plot for the designated
purpose should have started within three years of allotment. However, the
construction started in 2014 and that too for a commercial building, with 14
offices and 135 car parks in total," said Anil Galgali, a Mumbai based Right
to Information activist who has written to chief ministers of Maharashtra
thrice since 2013 to take the plot back. "I had written twice to Prithviraj
Chavan, then chief minister of Maharashtra to take the plot back. I have
also recently urged current chief minister Devendra Fadnavis through a
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letter to do so as the plot was allotted for a different purpose," he said.
The Bandra property is valued at about Rs. 300 crore on the basis of its
commercial development potential of over one lakh sq ft of office space.
Similar is the case with the one acre property in Patna's Adalatganj
area which has been lying vacant since it was given to the paper. Over the
past few years, the plot has been illegally occupied by slums that the
company has been trying to clear up. Associated Journals' newspapers
used to operate out of a leased space on Exhibition Road while the allotted
land remained empty, said media watchers in Patna.
But even an acre of vacant land in this part of the city would be worth
Rs 50-60 crore, said a property broker who operates in the area. With the
attendant buildings, it will be worth about Rs 100 crore. An older property
broker in the area recalled that some part of the property was converted
into shops which were sold off a few years ago. The 3,360 sq metre plot in
Panchkula that stands in the prime Sector 6, opposite the Haryana Police
headquarters, is Associated Journals' latest addition.
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A company was created for the purpose of starting a newspaper
“National Herald‟. The company got allocation of prime land in several
parts of the country. The land was meant to be used for the newspaper
business. Today, there is no newspaper. There is only land and built up
structures which are being commercially exploited.
Effectively, the Section 25 Company substantially controlled by the
leaders of the Congress Party now owns all the properties acquired for a
newspaper publication. And for virtually no consideration, the Section 25
Company owns all the assets. This profit will become huge taxable income
for it. Tax exempted income is used for a non-exempted purpose. They
have transferred the income of a political party to a real estate company.
The Criminal Court, meanwhile, has taken cognizance of the
offence. The High Court has agreed with the Trial Court. The
battle has to be fought legally.
About the Vyapam, Lalit Modi and other controversies involving two
BJP chief ministers and External Affairs Minister Sushma Swaraj, it may be
inquired whether the prosecuting agencies are going ahead and
investigations are progressing?
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Here are some key facts about the National Herald case, which has placed
the Gandhis squarely in the eye of a storm:
-The National Herald was a newspaper that India's first prime minister
Jawaharlal Nehru helped set in pre-Independence India in the year 1938. It
was part of a company called Associated Journals Limited, which was
funded by the Congress. An article in Mint quotes a biographer of Nehru as
saying that he found himself being unable to make an impact on the
'reactionary tendencies' in the Congress, after which the National Herald
was started. However, as the article pointed out, it faced financial
difficulties throughout its existence. The newspaper officially closed down in
April 2008.
-According to the Enforcement Directorate (ED), a private non-profit
company 'Young Indian' was formed in March 2011, with Sonia and Rahul
holding 38 percent of the shares each, allegedly with the specific aim of
taking over the liabilities of AJL. In 2012, BJP leader Subramanian Swamy
filed a complaint before a court. Swamy accused Congress leaders of
being involved in cheating through the acquisition of AJL by Young Indian
Pvt Ltd. He alleged that YIL paid merely Rs 50 lakh to recover an amount
of Rs 90.25 crore that AJL owed to the Congress. Going by the current
value of the properties of National Herald, the scam could be to the tune of
anywhere between Rs 1,600 crore and Rs 5,000 crore.
-The case has seen several twists and turns in the recent past. In August,
reports had suggested that the ED had decided to close the case, citing
lack of substantive evidence against Sonia and Rahul Gandhi. However,
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ED director Rajan S Katoch was removed from service after the reports to
that effect surfaced. In September, the ED decided to report the case.
The Delhi High Court has now rejected the plea filed by the Gandhis
challenging the summons, which means that they will have to appear
before the court unless the order is set aside. As of now, a Delhi court has
asked them to appear on 19 December and exempted them from personal
appearances on 8 December.
BJP booklet on NH issue
"It will give our leaders basic information
about the issue and help them in explaining the stand of party as well the
government. It will also give our spokespersons and leaders various talking
points so that they could highlight them in debates and discussion," he
said.
The BJP has resorted to bringing out booklets on almost every major issue
since it came to power in May 2014. The Congress had accused the
Central government of practicing "vendetta politics" and has alleged that
the National Herald case against Sonia and Rahul Gandhi is part of the
conspiracy.
The party has brought out booklets on a host of issues, including Land
Acquisition Bill, intolerance debate and the recent debate on Constitution.
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New Delhi: Escalating its attack on the Congress over the National Herald
case, the BJP has brought out a booklet titled 'Family Greed and National
Blackmail' that aims to "inform" its party leaders about the issue.
The party will distribute the booklet, which is a compilation of a number of
write-ups on the issue, among its MPs and leaders across the country to
"inform" them on the issue and give them "talking points", BJP
parliamentary party office secretary Balasubrahmanyam Kamarsu said.
"It will give our leaders basic information about the issue and help them in
explaining the stand of party as well the government. It will also give our
spokespersons and leaders various talking points so that they could
highlight them in debates and discussion," he said.
The BJP has resorted to bringing out booklets on almost every major issue
since it came to power in May 2014. The Congress had accused the
Central government of practicing "vendetta politics" and has alleged that
the National Herald case against Sonia and Rahul Gandhi is part of the
conspiracy.
The party has brought out booklets on a host of issues, including Land
Acquisition Bill, intolerance debate and the recent debate on Constitution.
10
New Delhi: The Congress seems to have changed its legal tactic and
adopted a combative strategy in the National Herald case. Sources have
revealed that Congress brass has decided that both Congress President
Sonia Gandhi and her son Rahul will appear before the lower court.
The reverse stand came in less than 24 hours after it approached the
Supreme Court to get a stay on personal appearance. The tactical shift
indicated that Congress wants to take the bull by its horns than letting its
opponents set the agenda for it.
Meanwhile, the case continues to rock Parliament. In Rajya Sabha,
Congress leader Ghulam Nabi Azad accused the government of
manipulating the Herald case. In the Lower House, there was a war of
words between Congress's Mallikarjun Kharge and Union Minister
Venkaiah Naidu. While Kharge alleged that government is indulging in
vendetta politics, Naidu accused the Congress of threatening judiciary
through Parliament.
The scene was no different outside Parliament as Congress Vice
President Rahul Gandhi accused the Prime Minister's office of political
vendetta and claimed that the Centre was threatening the judiciary.
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Subramanian Swamy, the Scarlet Pimpernel of Indian politics has proved to
be the harbinger of bad times for more than one political heavyweight. Ask
the Tamil Nadu Chief Minister, Ms Jayalalithaa Jayaram. She‟s the first
sitting chief minister in the country to be disqualified from holding office
after her conviction in a disproportionate assets case by a Karnataka court
in September last year. Jayalalithaa suffered the ignominy of going to jail
but was reinstated when the conviction was set aside by the Karnataka
High Court in May this year. However, that tale‟s not fully told since an
appeal in the Supreme Court against the HC decision could well turn the
tables against Jayalalithaa once again. Subramanian Swamy filed that case
in 1996.
In September 2010 the Supreme Court was petitioned in seeking the
prosecution of then Telecom Minister A Raja in something famously
became the 2G case. It was none other than the ebullient Subramanian
Swamy who had moved the Supreme Court.
Subramanian Swamy filed the National Herald case in 2012. Accusing
Congress leaders of cheating and breach of trust in the acquisition of
Associated Journals Ltd (AJL), Publishers of National Herald, by Young
Indian Pvt Ltd (YIL),Swamy contended that the “take over” was done in a
malicious manner to gain profit. Congress president Sonia Gandhi and vice
president Rahul Gandhi are directors in YIL. Besides the Gandhis,
Congress treasurer Motilal Vora, general secretary Oscar Fernandes,
journalist Suman Dubey and technocrat Sam Pitroda were also named in
the case.
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Swamy has alleged that YIL has paid just Rs50 lakh to obtain the right to
recover Rs90.25 crore loan the AJL owed to the Congress party. He says
the Rs 90.25 crores owing to the Congress Party could easily be paid off by
partial sale of assets. Sonia Gandhi and Rahul Gandhi own 76 per cent of
YIL. The complaint has also alleged that the loan, taken from party funds
and given to AJL, was “illegal”.
The Congress says that no director of YIL has derived any financial
benefit from either the company or its dealings with AJL. It further claims
that all the assets and income of AJL continue to remain with the company
and not gone to YIL, YIL directors or YIL shareholders. By advancing Rs 50
lakhs to AJL and taking over the responsibility of recovering the Rs 90
crore debt, YIL had effectively wiped out AJL‟s debt enabling it to raise
bank loans to refurbish its properties or build on them to increase its
income. The legal merits of the case will be decided by the courts although
that‟s likely to take a long time going by past experience.
Meanwhile, both sides say the case has been “politicised.” The
Congress claims that the Enforcement Directorate (ED)closed its case
investigations in August this year “because there was no evidence of any
wrongdoing. But the then ED Director was sacked and just a month later in
September 2015 the case was reopened.” The Congress alleges that
senior BJP leaders “have made frequent and partisan pronouncements in
the media — a clear attempt to influence public opinion and tarnish the
reputation of the Congress Party and its leadership on a false pretext.”
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It has redoubled efforts to disrupt Parliament. This means that crucial
legislation such as the ones relating to GST and Land Acquisition will
remain in cold storage. The BJP has retaliated by accusing the Congress of
defending the indefensible.
Whatever else it may be, the National Herald case is clearly “political.”
Anything that Subramanian Swamy touches, apart from his morning idlis
and forenoon thayir sadam, has to be political and so is this case. It could
upset the anti-BJP applecart in the coming months. Of course, the reverse
also could well be true. The anti-BJP formation that swept the Bihar
assembly elections last month owes much to Sonia and Rahul Gandhi.
True, the Congress came in a distant fourth in that election but Sonia and
Rahul Gandhi were crucial to bringing together the irresistible Lalu Yadav
and the immovable Nitish Kumar. Without their earnest efforts, the unity
wouldn‟t have been possible.
Evidently it is Sonia Gandhi who convinced Lalu Yadav not only to
team up with Nitish but also to allow him to play “first fiddle” in the concert!
It stands to reason therefore that anything that could adverse impact the
Gandhis would be a major setback to the functioning of an anti-BJP
electoral front: precisely what the National Herald case could achieve.
Assembly elections are due in Tamil Nadu, West Bengal, Kerala,
Puducherry and Assam where the terms of the present legislatures are
ending in May and June next year. The Congress in general and the
Gandhis in particular need to perform superlatively in these elections in
order to keep the post-Bihar momentum going. Though a junior partner in
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Bihar, the Congress, happens to be the only all-India party in that front
providing it with the “political glue” to bind it together and attract other
regional allies in untapped states such as UP, Odisha, Seemandhra and
Telengana. Any decline in the Congress‟ fortunes is likely to affect the
entire block adversely. The National Herald Case could severely tarnish the
image of the Gandhis and hurt the entire anti-BJP front
Kerala and Tamil Nadu don‟t really count in this calculation. The former
famously votes alternately for the Congress-led United Democratic Front
and the CPM-led Left Democratic Front. The latter is witness to a two-horse
race between Jayalalithaa‟s AIADMK and the DMK led by M Karunanidhi
and son MK Stalin. West Bengal and Assam could prove significant. The
Congress has been in power in Assam for three consecutive terms. A
strong anti-incumbency wave coupled with a resurgent BJP could spell
doom for the Congress in Assam. Recent elections have been more than
unkind to the Narendra Modi-Amit Shah duo.
Having lost Delhi ignominiously soon after winning India and then
trounced in Bihar, the duo are battling for one famous victory to redeem
themselves. And Assam is that battleground. Modi has set a target,
“Mission 84” to win those many seats in the 126 strong State Assembly. He
has ensured that at least one of his Central Ministers visits Assam every
week. The National Herald “ghotala” would be grist to Modi‟s electoral
rhetoric.
West Bengal could prove interesting. The Congress opted to contest
the 2011 Assembly elections as a junior partner of Mamata Banerjee‟s
Trinamool Congress, winning 42 of the states 294 assembly seats. The two
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parted ways thereafter and the Congress won just four of West Bengal‟s 42
seats in last year‟s Lok Sabha elections. Is it possible that the two will
reunite once again? That could perhaps be the silver lining for the
Congress.
However the long shadow of the Herald case could well put paid to all
of this. Not too many will be prepared to take a chance if the image of the
Gandhi‟s gets tarnished any further, and this time Manmohan Singh won‟t
be eligible to play the fall guy.
National Herald Case: Is There An Oblique Political Objective By The BJP?
By George Abraham 15 December, 2015 Countercurrents.org
India is once again in the throes of another political storm of great
magnitude that threatens not only to setback the current legislative agenda
of the Parliament‟s winter session but may also permanently fracture the
trust needed for future consensus among political parties to conduct the
nation‟s business. The National Herald case has all the familiar hallmarks
of a political mud fight rather than the true ingredients needed to prove any
alleged impropriety and/or violation of laws.
National Herald was started by Pandit Jawaharlal Nehru in 1937 along
with other leaders of the independence movement. Undoubtedly, it was a
symbol of this struggle and provided a voice to the freedom movement
across the country. In addition to Pandit Nehru, freedom fighters like
Purushottam Das Tandon, Acharaya Narendra Dev, and India‟s first
Communications Minister, Rafi Ahmad Kidwai were among the first
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subscribers and signatories to the memorandum of Association of the
„Associated Journals Limited (AJL)‟.The company that was published
National Herald and later Quami Awaaz and Navjeevan.
From its inception, the National Herald was in poor financial health.
There were reports to the effect that Mahatma Gandhi originally even
opposed the idea of the Congress party owning a newspaper but relented
to the wishes of Pandit Nehru and others in the party. The determination of
Nehru to carry on with the publication despite the heavy odds against it is
quite evident in his statement; “I will not let the National Herald close down
even if I have to sell Anand Bhavan.”
The Congress party supported AJL until now because of its rich and vibrant
legacy associated with the freedom struggle, as well as its inextricable link
with the policies and principles of the Indian National Congress. Despite the
editorial excellence of the paper, AJL continued to bleed financially and ran
into losses year after year. The published records show that AJL received
multiple loans adding up to 90 crores from the Congress Party.
It has come to a point where no bank would sanction AJL a loan
because of the 90 crore debt in its balance sheet, and its benefactor, the
Congress Party, had no choice but to rethink its strategies. Towards that
end, some of the most eminent experts were consulted, and their
considered advice was to form a section 25 not-for-profit company called
„Young India‟. Further, in order to bail out AJL and free it from the burden of
debt, the loan was reassigned to the not-for-profit company. In so doing,
Congress party leaders truly believed that it could rescue and revive
Nehruji‟s paper while relieving AJL of its financial distress. In today‟s world,
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conversion of debt into equity is a normal business practice to restore the
financial health of companies that are over-burdened with debt.
All shareholders of AJL, who were present and voting on 21st
January 2011, approved the advice of the experts unanimously. Meanwhile
AJL, now able to borrow money for the first time in years, renovated its
Delhi building and rented them at the current market rates. It is believed
that these new avenues of income would fund the re-launching of the
National Herald in the foreseeable future.
Undoubtedly, there are a number of misconceptions promoted by
groups intending to tarnish the image of the Congress party. A few things
are quite evident upon the examination of this case: 1) the Assets and
properties owned by AJL will continue to remain with AJL; 2) no assets
have been transferred from AJL to „Young Indian‟; 3) as Directors or
Shareholders of „Young Indian‟, Smt. Sonia Gandhi or Shri. Rahul Gandhi
is prohibited by law from drawing any financial benefits from the company;
4) At the Extraordinary General meeting in 2011, shareholders were
present and unanimously voted to approve the issuance of fresh equity to
„Young Indian‟, in order to extinguish the debt of AJL.
It is also clear to independent observers that AJL was directed and
sustained over the years by a successive leadership of the Congress Party,
and this continues to remain the case today. The newly created „Young
India‟ also lists the major office holders of the party as its shareholders. In a
nutshell, this whole exercise appears to be a major overhaul of an entity
within an organization that has become financially burdensome because of
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its debt, and otherwise unresponsive to revival in the prevailing market
conditions. Political Parties in India are under no restriction in giving loans
or restructuring their various entities. A complaint along these lines by
Subramanian Swamy was dismissed by the Election Commission in 2012.
In light of all of these clarifications, why is there still all of this hubbub? BJP,
at the outset, would want everyone to believe that it was a case brought up
by Subramania Swamy in 2012, and they (the BJP) have very little to do
with it! However, this case was reopened by Enforcement Directorate after
Rajan S. Katoch, the ED Director, was removed from service after his
recommendation to close the case due to lack of evidence against two
leaders. In addition, the BJP has already brought out a booklet called
„Family Greed and National Blackmail‟ in a deliberate attempt to sully the
names of the Congress President and the Vice-President.
Kapil Sibal, a senior Congress leader and lead attorney, in this case, said
the following: „The BJP, in the last year or so, has been targeting the
leaders of the Congress Party. Since they have no idea how to govern the
country, they want to distract the attention of people from the promise of
good governance. They have targeted the Congress Party president Smt.
Sonia Gandhi, Rahul Gandhi and our leaders Virbhadra Singh, who was
accosted during his daughter‟s wedding, ShankarsinhVaghela, Ashok
Gehlot and Sachin Pilot. They have filed sedition charges against young
people in Gujarat and targeting West Bengal, Madhya Pradesh and Bihar‟.
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Since the ascension of BJP to power in 2014, there is a growing
intolerance to dissent in a democratic framework. For some in their
leadership, a responsible opposition is altogether an inconvenience to the
unilateral BJP agenda. Senior BJP leaders who appear to have taken an
oath for a „Congress-free Bharat‟, might believe that the top leadership of
the Congress party in the Court in an alleged case of cheating and criminal
breach of trust makes for bad optics and will help them in their quest to
discredit and destroy them politically. There is no doubt then why Sonia
Gandhi and Rahul Gandhi became their prime targets.
Subramanian Swamy is a known operative for the BJP, and his
malevolence and hatred towards the Nehru family and anything Nehru
touched including the venerable National Herald is well documented. He
has long been discredited on these shores for his vitriolic statements
against minorities in India, which got him booted out from the prestigious
Harvard University in the immediate past. In one of his infamous quotes
from 2011, he states „implement the uniform civil code, make learning
Sanskrit and singing Vande Mataram mandatory, and declare India a Hindu
Rashtra in which non-Hindus can vote only if they proudly acknowledge
that their ancestors were Hindus. Rename India Hindustan as a nation of
Hindus and those ancestors were Hindus”. In his view of the world, Smt.
Sonia Gandhi or any other foreigners our sons or daughters may marry will
be permanently relegated to second-class citizenship. Unfortunately, his
demagoguery and bigotry come in handy for the BJP in its stealth
campaign to undo the Nehruvian legacy.
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Filing the plea, Congress leaders insisted that Swamy is a political
opponent, insisting that the present criminal proceedings have been
initiated only with intent to secure an oblique political objective! Hopefully,
the days ahead may prove just that!
(The writer is a former Chief Technology Officer of the United Nations and
Chairman of the Indian National Overseas Congress, USA)