Thursday, 26 June 2014

The Great “National Herald” Robbery – Who, How & Why.

Congress President Sonia Gandhi and Vice-President Rahul Gandhi have been summoned by a Delhi court as accused in a criminal complaint lodged by Dr. Subramanian Swamy for alleged cheating and misappropriation of funds in acquiring ownership of now-defunct daily National Herald.  Metropolitan magistrate Gomati Manocha issued summons proclaiming that "complainant has established a prima facie case against the accused under section 403 (dishonest misappropriation of property, 406 (criminal breach of trust) and 420 (cheating) read with section 120B (criminal conspiracy) of IPC. Hence, let the accused, all Directors of Young Indian - Sonia Gandhi, Rahul Gandhi, Moti Lal Vohra (AICC Treasurer), Oscar Fernandes (AICC Gen Secy) and managing committee members- Suman Dubey (Ex Press Advisors to Congress PMs) and Sam Pitroda (Ex Chairman of National Innovation Council set up by Congress Govt) be summoned for August 7, 2014”.
 
The Associated Journals Ltd (AJL) is the owner and publisher of National Herald (English daily), Navjivan (Hindi daily) and Qaumi Awaz (Urdu daily), which was set up at the initiative of Jawaharlal Nehru on November 19, 1937 (birthday of his daughter Indira) under the Indian Companies Act, 1913. It had a capital of Rs 5 lakh divided into 2000 Preference Shares of Rs 100 each carrying a fixed but non-cumulative dividend of five per cent per annum and 30,000 ordinary shares of Rs 10 each. The Memorandum of Association announced its objective, “To establish and to carry on in the United Provinces and elsewhere the business of news agency, newspaper and magazine proprietors, printers and publishers and all similar and incidental trades thereof and in this connection to do all such things as may appear to the Directors to be in the interests of the Company”. The signatories included Jawaharlal Nehru, Purushottamdas Tandon, J Narendra Deva, Kailash Nath Katju, Rafi Ahmad Kidwai, Mohan Lal Sakra and Krishna Dutta Paliwal. The document was witnessed by Govind Ballabh Pant. The National Herald group was set up essentially as Indian-owned and financed newspapers to support the freedom movement. The individuals and Indian companies that donated funds for this enterprise were contributing to the Congress party for the freedom movement. After 1947, the rise of the independent media made this essentially party-controlled newspaper unviable.  Though its founders became the ruling establishment of independent India, National Herald and the other papers launched by them never achieved much success and after floundering for years, publication finally stopped in 2008. After independence, the Herald Group survived on support provided by the Congress party and Govt.  till even that became unsustainable. To pay off the employees (VRS) to help the closure, the Congress Party had given an interest-free loan of Rs 90 crore plus to AJL in 2008.  With the newspapers  shut, AJL had become a mere real estate company in 2008, with property in Delhi, Lucknow and Mumbai etc. worth over Rs 2,000 crore in its balance sheet. Against this,  AJL owed just Rs 90-crores plus to the Congress party.  The balance real estate of AJL, left after paying off the dues to Congress, should have legally and morally belonged to AJL’s thousand plus shareholders.
 
The list of AJL’s shareholders submitted to Registrar of Companies as reflected even in the year 2011 reveal that from its inception in 1937, Associated Journals Ltd. did not deem it fit to maintain its records properly. When shareholders died, their legal heirs / nominees did not replace them. The same is the case with defunct companies whose promoters and their heirs were entitled to shares of Associated Journals. Keeping defunct shareholders from 1937 to 2011 suggests they comprised a sort of default vote-bank for those controlling the company. The 2011 list mentions Jawaharlal Nehru (died in 1964), Co-founder Rafi Ahmad Kidwai (died in 1954), Feroze Gandhi (died in 1960), Indira Nehru Gandhi (died in 1984), Ghanshyam Das Birla (died in 1983), NS Pandit and Vijaya Lakshmi Pandit (died in 1990), Kailash Nath Katju (died in 1968), former Chief Justice of India Mirza Hameedullah Beg (died in 1985), Yagya Dutt Sharma (died in 1996), Sucheta Kripalani (died in 1974), Mohammed Yunus (died in 2001), Jitendra Prasad (died in 2001), HY Sharda Prasad (died in 2008), Lalit Suri (died in 2006) among others. Many firms are also long extinct. One shareholder, Punjab Pradesh Congress Committee, is possibly not legal as a political party cannot enter into any commercial activity. As such 80% of the shareholders are either individuals who died or extinct in case of firms. That this may not have been an accidental omission can be seen from the fact that from time to time members of the Nehru-Gandhi family and their close associates entered the shareholder list — Indira Gandhi and Feroze Gandhi and later their grandchildren, but others offspring did not. The Nehru-Gandhi family was controlling the AJL indirectly through their cronies over the years and Moti Lal Vohra, the AICC Treasurer was its Chairman and Managing Director till it got taken over by  “Young Indian”, a sham company directly run and controlled by Sonia and Rahul Gandhi.  The AJL’s 2008 list of Shareholders and Debenture Holders shows that the name of Rahul Gandhi is written by hand on Page 49 with no shares or debentures allotted. In the List for 2011, “Young Indian” figures as the last entry, address N-125 Panchsheel Park, New Delhi-17 with  9,02,16,898 shares allotted. Moti Lal Vohra had signed this document in his capacity as Managing Director. With most of the original shareholders dead and shareholding companies defunct, the holding company, The Associated Journals Ltd should have been legally dismantled. Since, the real estate in various parts of the country was given by the Government to it at below market prices to support it’s cause, it should have been returned to the State. Instead, the ownership of properties amounting to over 2000 Crores in prime locations across the nation was allowed to be spirited away into the private coffers of the Nehru-Gandhi family.  By defying both law and morals, Sonia Gandhi and Rahul Gandhi robbed AJL’s Rs 2,000-cr plus real estate without paying anything to AJL’s shareholders or to the state. In just 3 months, between November 2010 and February 2011 with 3 moves, control of thousands of crores worth property passed onto the Gandhi family.
 
First, in November 2010, a trust company named “Young Indian” was formed (Registration no. 55-210686), registered under section 25 of the Companies Act, 1956 with a capital of just Rs 5 lakh, in which Sonia Gandhi and Rahul Gandhi owned 38% each (total 76%) and two of their cronies, Moti Lal Vohra (Treasurer of Congress as well as Chairman & MD of Associated Journals Ltd.) and Oscar Fernandes (Cong Gen Secy), owned the balance 24 per cent, making it a 100% Gandhi family outfit. Apart from them, the other 2 directors are Suman Dubey and Sam Pitroda, both Gandhi family loyalists. And, what is the mission of Young Indian? Young Indian says in its annual report  that, “it is engaged in activities to inculcate in the minds of India’s youth commitment to the ideals of democratic and secular society”.
 
Second, what is the first act of this idealist company, after its birth? The very next month, in December 2010, the board of directors passed a resolution to "own" AJL's outstanding debt and "admittedly obtained an unsecured zero interest loan from the Congress Party" for an equivalent amount to liquidate the debt.  Thus Gandhis  got the Congress party to assign the Rs 90-cr plus loan given to AJL in 2008 to Young Indian by paying to the party just Rs 50 lakh. The Congress wrote off the balance Rs 89.75 cr as irrecoverable bad debt.
 
Finally, in February 2011, AJL converted the Rs 90-cr plus due to Young Indian into equity shares and allotted them. By this step, Young Indian became almost 99% owner of AJL and as much of the real estate of AJL. There was no general body meeting of shareholders to discuss and approve this huge gift of prime estate to a private firm. Moti Lal Vohra, Chairman of The Associated Journals Ltd, informed the Board of Directors in a meeting held on February 26, 2011, that 9,02,16,898 equity shares of Rs 10/- each be allotted to Young Indian in consideration of the extinguishment of the amount of Rs 90,21,68,980/- due to Young Indian under loan facility availed by the Company from Congress party. There is no explanation as to when AJL had assets worth more than Rs 2,000 cr, why should the Congress write off Rs 89.75 cr due from it as bad debt?
 
Young Indian’s annual report discloses that AJL was restructuring “its activities” to align its objective with that of Young Indian’s main objective. But why - finally to merge AJL into Young Indian? But its director’s report shows that, from the inception in November 2010 to March 2012, its total income was — only Rs 800 and  its total expenditure was Rs 69.79 lakh and its loss, after deducting its income was Rs 69.78 lakh. Did AJL, with its huge real estate, need an asset-less and income-less pauper like Young Indian for its restructure? Young Indian’s annual report intentionally conceals the crucial fact that the loan of Rs 90-cr plus owed by AJL was originally due to the Congress party and also suppresses the fact that AJL with asset base of a couple of thousands of crores had become its wholly-owned subsidiary. This is a fraud as per company law, which mandates that the details of the subsidiary be available to the public. Young Indian also totally suppresses its 99% holding in the AJL saying that the shareholding “is treated as application on the object of the company” and so “the same has not been reflected as an investment in shares”. This deceptive accounting jargon means that the payment of  50 lakh for 99 per cent of shares of the AJL worth thousands of crores is shown not as an asset, but as expenditure. This is to keep the investment out of the balance sheet of Young Indian. The annual report blatantly lies that since the net worth of AJL is negative, its investment in 99% capital of AJL is written off as expenditure. The balance sheet of AJL as on March 31, 2011, shows a positive net worth Rs 8 crore, of which Young Indian’s 99% share is Rs 7.92 cr. So the negative net worth story is a fabrication. The real net worth of Young Indian is, of course, over Rs 2,000 cr.
 
And now what is the current status of the most valuable property owned by the Associated Journals Ltd, which passed on to Young Indian? National Herald House in 5A, Bahadur Shah Zafar Marg, New Delhi has been rented out to Ministry of External Affairs for its passport office and Young Indian receives Rs. 60 lakhs per month for this from Govt. of India.
 
Now, when Dr Swamy has exposed Congress party and its leadership, the Congress spokespersons are trying to tell the nation, that revival of National Herald, a symbol of Gandhi-Nehru ideals, was an “emotional issue” for the party and therefore as a duty  it had paid Rs 90 cr plus for Herald’s revival. But what Congress is not revealing is that it actually paid that money in the year 2008, to help close and not revive the National Herald. Also, the Sonia-Rahul owned Young Indian had no intention to revive National Herald while dubiously taking control of AJL, which Rahul Gandhi told “The Pioneer” newspaper on 11th October 2012 - “Young Indian is a not-for-profit company and does not have commercial operations…. The company has no intention of starting any newspaper”.  Pandit Nehru once said that “I will not let the National Herald close down even if I have to sell (my own house) Anand Bhawan”. And now his descendants -  these fake Gandhis  have buried the National Herald and looted its real estate.
 
Hence, it is a clear case of gross violation of company law and a fit case for criminal prosecution. But can the Modi Govt prove it’s political will and judiciary & law enforcement agencies of the nation prove their integrity by doing their duty to punish this fraudster family? History will judge them by what they do or don’t do in this case. This is a test for democracy and institutions of justice of our nation. The common men is eagerly waiting to see the triumph of good over evil.