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A move too late: Congress releases FAQs on National Herald to counter Subramanian Swamy's allegations

Speed News Desk | Updated on: 14 February 2017, 12:58 IST

After a week of stalling Parliament proceedings on the National Herald issue and accusing the BJP of resorting to "political vendetta", Congress has finally put out some empirical explanation in the public domain.

Also read: The albatross around the Gandhis' neck: what's the National Herald case?

However, the measure is a proof of their tactical failure. Instead of presenting a stronger response earlier, the party chose to stall Parliament - at a time when crucial bills like the GST are pending. By not fighting the allegations at the very onset, the party sent out the message of being anti-development.

Although the FAQs are a much-delayed response, they are an attempt at establishing that the Gandhis have not made any personal fortune out of the assets owned by Associated Journals Ltd.

Here's what the Congress party has to say:

1. Have Sonia Gandhi or Shri Rahul Gandhi benefited financially from Young Indian?

No. As directors or shareholders of Young Indian, a non-profit, Section 25 company, they are prohibited by law from drawing (and have not drawn) any financial benefits from the company.

2. Have any assets been transferred from The Associated Journals Ltd. (AJL) to Young Indian (YI)?

No. All the assets and the income of AJL remain with the company. Not a single paisa has gone to YI, YI Directors or YI Shareholders.

3. Does YI today own the property owned by AJL?

No, both YI and AJL are separate entities. All assets and properties of AJL continue to remain with AJL. This allegation is akin to falsely alleging that a shareholder in Indian Hotels Ltd. has rights on hotel properties of the Taj Group and owns a particular hotel or can move into it!

Also read: Dear Rahul, stalling Parliament on National Herald is the dumbest idea ever. Here's why ...

4. Young Indian was created to usurp the property owned by The Associated Journals Ltd.?

False. On the contrary, Young Indian, being a non-profit Section 25 company, as the major shareholder AJL, in fact, enhances the safeguards on the properties of the AJL.

5. Why did the Congress Party give loans of Rs 90 crore to AJL?

The Congress Party financially supported AJL over several decades through the financial ill health of the company. This reflected the Party's commitment to support AJL, the voice of the freedom movement.

The founding document of AJL from 1937, i.e. the company's Memorandum of Association, states in Object (t): "The policy of any newspaper, periodical, magazine or journal issued by the Company shall generally be in accordance with the policy and principles of the Indian National Congress."

This demonstrates the inextricable link between AJL and the Congress Party from AJL's inception. The Congress Party sought to fulfill its own objects by supporting AJL.

6. Arun Jaitley called Young Indian a real estate company. Is this true?

Absolutely false. YI does not own a single real estate asset or immoveable property. AJL continues to own all its assets. The allegation is, therefore, completely baseless.

Also read: What political vendetta! Congress looks more like a spoilt brat

7. Why did AJL not go to a bank in 2010 to repay its Rs. 90 crore debt?

There was a Rs. 90 crore loan from the Congress Party on AJL's balance sheet. No commercial bank was willing to lend a single rupee to AJL due to the negative worth of the company, its meager income and its over-levered balance sheet.

8. Are political parties allowed to give loans?

Yes. There is no restriction in law on political parties giving loans. In fact, the Election Commission of India issued a clear order in this regard in November 2012. Shri Subramanian Swamy had sought the de-recognition of the Congress on this ground but his complaint was dismissed by a full bench order of the Election Commission.

9. How bad was AJL's financial position?

Details of profit and loss (in Rs. Lacs) are below. Please note that after AJL's debt of Rs. 90 crores was extinguished in February 2011, AJL was able to declare its first profit in several years in 2011-12 and came into the black from the red. This was only as a result of the financial revival plan of AJL as conceived by the Congress Party.

10.What did AJL do with the financial support given by the Congress Party?

The money was used to pay unpaid salaries, VRS, taxes, dues to civic agencies and statutory and other liabilities/payables.

11.Why were the assets of AJL not liquidated?

The majority of AJL's properties were government leases, which prohibited sale of land.

12.Were the shareholders of AJL cheated, as some have alleged?

All the shareholders present and voting at the Extraordinary General meeting in 2011unanimously approved issuance of fresh equity to YI to extinguish debt of AJL. The question of cheating shareholders does not arise.

13.Will the National Herald be revived?

AJL has every intention of reviving the National Herald newspaper and restoring the media voice that Pandit Jawaharlal Nehru had founded.

14.Why should a political party have anything to do with a newspaper?

Every political party needs to effectively communicate its ideology and its policies to the public at large. A newspaper provides a channel through which to do this.

But is the move a tad too late?

The FAQs were released a day after former law minister Shanti Bhushan claimed that his father, a Congressman, had bought a large number of AJL shares and alleged that the transfer of equity from AJL to Young India was arbitrary and illegal.

On 12 December, The Indian Express reported that at least 10 shareholders of AJL have claimed that the company's chairman, Motilal Vora - and its directors Sonia and Rahul Gandhi - did not seek their approval while deciding to transfer its shares to Young Indian Pvt Ltd (YIL) in December 2010. Vora is also the treasurer of Congress. Sonia and Rahul Gandhi have a majority stake in Young Indian Private India company.

Sonia and Rahul will have to appear before the Patiala House Court on 19 December for the next hearing of the National Herald case.

First published: 12 December 2015, 3:49 IST
 
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