ED Raids National Herald Head Office, 11 Other Locations In Money Laundering Case 

The Enforcement Directorate (ED) on Tuesday raided the head office of the Congress party-owned National Herald newspaper in Delhi and 11 other locations as part of an ongoing money laundering investigation, officials said. 

The ED raids on these 12 locations comes a week after it questioned Congress chief Sonia Gandhi in the case. Earlier, ED had questioned Congress leader and Sonia's son Rahul in multiple sessions spanning over 50 hours in the case.

The ED is carrying out searches under criminal sections of the Prevention of Money Laundering Act (PMLA) to "gather additional evidence with regard to the trail of funds and they are against those entities who were involved in the National Herald-linked transactions", according to officials.

Officials added that action is being undertaken in light of fresh evidence obtained by the ED after the latest questioning of various people in this case.

Besides Rahul and Sonia, senior Congress politicians like Mallikarjun Kharge and Pawan Bansal were also questioned by the ED in April. While Rahul has questioned for over 50 hours over five days, the ED has questioned Sonia for over 11 hours spread over three rounds. 

The National Herald is published by the Associated Journals Ltd. (AJL) and its holding company is Young Indian Limited (YIL).

ED officers searched the office of the National Herald located in the 'Herald House' building at Bahadur Shah Zafar Marg near ITO in central Delhi. The office is registered in the name of AJL.

According to officials, the location of a shell (dummy) company in Kolkata involved in the case, has also been covered in the raids.

The Congress party had called the ED action against its leaders "political vendetta", saying there was no money laundering in the case.

The Congress party has said it gave a Rs 90 crore loan to an ailing AJL between 2001-02 and 2010-11 and later, in 2011, the shares of AJL were allotted to YIL and this debt was converted into equity and the loan was extinguished in the books of the AJL. 

The ED claims these transactions attract anti-money laundering charges as a complex web of transactions and routing of funds were undertaken by Congress and its leaders to acquire AJL's assets worth multiple crores of rupees.

The Gandhis are understood to have told the ED during their separate questioning sessions that no personal assets were made in the Congress-AJL-National Herald deal as YIL was a "not-for-profit" company established under section 25 of the Companies Act. They also told the ED that AJL continues to have possession of all its assets and YIL neither "owns nor controls" these properties.

Sonia and Rahul are among the promoters and majority shareholders in YIL. They 38 per cent shares of YIL each.

The ED action in the case was initiated after the agency late last year registered a fresh case under the PMLA after a trial court in Delhi took cognisance of an Income Tax Department probe against YIL based on a private criminal complaint by Bharatiya Janata Party (BJP) MP Subramanian Swamy in 2013.

Swamy had accused the Gandhis and others of conspiring to cheat and misappropriate funds, with YIL paying only Rs 50 lakh to obtain the right to recover Rs 90.25 crore that AJL owed to the Congress.

In February 2021, the Delhi High Court issued a notice to the Gandhis seeking their response to Swamy's plea.

According to the ED, assets worth about Rs 800 crore are "owned" by the AJL and the agency wants to know from the Gandhis how a "not-for-profit company like Young Indian was undertaking commercial activities of renting out its land and building assets". 

The Congress party has said that the Income Tax Department has valued AJL's properties at worth about Rs 350 crore. 

The real-estate angle is critical to the case. By acquiring AJL, the Gandhis-owned YIL also acquired AJL properties. It's controversial as they inherited such massive real estate in lieu of loan of 90 crore at a payment of Rs 50 lakh, as per Swamy's complaint. 

The Mint explains: In 2010, AJL's board approved the assignment of Rs 90.21 crore in accumulated loans taken from the All India Congress Committee to YIL. This debt was then retired for a consideration of Rs 50 lakh, which YIL paid to AICC. On AJL’s books it was converted into equity.

The Mint quoted an accounting expert as saying: "What inference can be drawn [from this exercise]? Was this [new company YIL] established to transfer loan? Why did AICC need to transfer loan to YIL? What benefit did it expect? If it was a bad loan with AJL and was bad with YIL as well, what was the need [for doing all this]?"

(With PTI inputs)