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Saturday, 28 June 2014

Decoding- National Herald Case


A local Delhi court magistrate Gomati Manocha's has summoned Congress President Sonia Gandhi and Vice President Rahul Gandhi to present in court before 7th august. BJP leader Subramanian Swamy had filed a PIL against Congress party for misappropriation of funds. This is first time in the history of Congress party, first family of the party has been summoned by an Court.




It can be a wonderful case study for the B-school students, that how congress party made 2000 crores out of nothing. Let’s take a deep look on the case, as it is really misappropriation of funds or merely politically motivated campaign by Swamy as Congress is defending. Lets understand the full case.

The National Herald was established by Congress party veteran Nehru in 1938. The company was suffering from huge loss and as a result closed down in 2008. The National Herald publisher had huge assets in New Delhi, Lucknow, Panchkula, Indore and Mumbai. 

In 2010, a company name Young Indian was started under the Section 25, in the Companies Act, 1956. Congress president Sonia Gandhi and vice-president Rahul Gandhi has acquired 76% shares of the company. The rest of shares were acquired by Congress party treasurer Motilal Vora, General Secretary Oscar Fernandes and Gandhi family friend Suman Dubey and technocrat Sam Pitroda. 

Associated Journal group was facing the huge loss of 90 crores. Young Indian group which was basically a congress party company bought Associate journal in 50 lakhs. In the revert Young Indian company has to pay the loss of 90 crores of Associated journals.

Young Indian company acquired a loan of 90 crores from Congress party only with no interest and took over all the assets of Associated Journal worth 1600 crore. As Young Indian company has got loan from Congress party. It is obvious political parties get the donations from the public money. This is how Congress party own company made 1600 crores in just 50 lakhs.


Why it is a case of fraud-


I have mentioned above how Congress party led Young Indian acquired the public limited company, the Associated Journals Ltd, which is the publisher company of National Herald. The deal is a fraud, bogus and a violation of numerous laws. It is a fraud committed in order to grab the Herald House in Delhi that is located in a hub and which is worth about 1600 crores.

The very first reason is the Associated Journals Company RoC details is that Jawahar Lal Nehru, Feroze Gandhi, Indira, and some other noted persons are shown as current shareholders! In fact, 80 per cent of the original shareholders are no more alive. So too many of the obsolete firms, including several companies having doubtful addresses in Kolkata, are shown as shareholders of the Associated Journals.

The second reason is the acquisition of the Associated Journals Ltd. Judging by documents filed with RoC is absolutely illegal. On Feb 26, 2011, the Board of Associated Journals passed a resolution approving AICC (All India congress committee) had loans to the Company indiscreet and for zero interest rate to quench the obligation of the company of more than rs 90 crore. It is illegal for a political party to give loans to any private company.
The third reason is that Indian Government accommodation cannot be used for private business. In a filed statement by Young Indian disclosing RoC that meeting of shareholders was taken place at Janpath, 10.

The fourth reason is a political party cannot give interest free loan to any business venture. Thus, the deal was to grab all the properties of Associated Journal in Delhi and in different part of UP for a commitment to pay Rs 50 lacs is purely illegal.