A private company managed by Sonia Gandhi, Rahul Gandhi, Moti Lal Vora, Oscar Fernandes, Suman Dubey and Satyan G Pitroda, has quietly acquired the over Rs 600 crore estate and properties belonging to the Jawaharlal Nehru-founded The Associated Journals Ltd for the paltry sum of Rs 50 lakh. The acquisition, which was finalised as recently as April 26, 2012, covers an ‘extinguished’ loan of over Rs 90 crore from the All-India Congress Committee.
The Associated Journals Ltd is the owner and publisher of National Herald (English daily), Qaumi Awaz (Urdu daily) and National Herald International Weekly.
Amethi MP Rahul Gandhi is a Director in the said firm, Young Indian (Registration No 55-210686), which is a private company registered under section 25 of the Companies Act, 1956. Its principal aim is to inculcate “in the mind of India’s youth, commitment to the ideal of a democratic and secular society for its entire populace without any distinction as to religion, caste or creed and to awaken India’s youth to participate in activities that promote the foregoing objective”.
As this has nothing to do with journalism, it is unclear why Young Indian is acquiring the huge assets of a newspaper company for its activities.
As per the Notes to Accounts for the period ended March 31, 2012, a public limited company started by Jawaharlal Nehru with 5,000-odd shareholders has effectively become a private firm managed by Sonia Gandhi and Rahul Gandhi, using funds from the AICC. The legality of a political party giving a loan to a private person to set up a private firm remains questionable.
In fact, many aspects of the deal are problematic. The Notes to Accounts (II.1) states that in pursuit of its objects, “the Company acquired loan owed of Rs 90,21,68,980 by The Associated Journals Ltd (‘the said Company’), presently engaged in achieving a recast of its activities so as to have its main object congruent to the main object of the company, for a consideration of Rs 50 lakh”.
It continues, “As a part of restructuring exercise of the said company, the said loan was converted into 9,02,16,898 ordinary shares of Rs 10 each fully paid. Since said acquisition is treated as application on the objects of the company (and accordingly, treated in the financial statements of the company), the same has not been reflected as an investment in shares. Besides, even if the shares were to be treated as an asset (‘investment’), having regard to the fact that the net worth of the said company is negative, recognising the entire cost as “diminution in value” would result in an equivalent charge to the Income & Expenditure Account.”
This statement has been signed for and on behalf of the Managing Committee by Pradeep S Shah, Partner, Chandrakant & Sevantilal Chartered Accountants, Suman Dubey, director, and Moti Lal Vora, director.
It is pertinent that the official address of Young Indian is 5A, Herald House, Bahadur Shah Zafar Marg, Delhi, 110002, which is also the official address of publications owned by The Associated Journals Ltd, the registered office of which is Nehru Bhawan, 1 Bisheshwar Nath Road, Lucknow, Uttar Pradesh.
Prima facie there seems to have been no general body meeting of shareholders to discuss and approve this huge disbursal of public property to a private firm. The records show that Moti Lal Vora, chairman, The Associated Journals Ltd, informed the Board of Directors in their 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 All India Congress Committee.
Resolution No. 3 continues that this loan facility and all the benefits thereunder was approved by the board in the board meeting held on 21.12.2010 and by the shareholders by a Special Resolution in the Extraordinary General Meeting of the members held on 21.01.2011.
Vora requested the board to approve the allotment of 9,02,16,898 equity shares of Rs 10 each to Young Indian.
This is simply unprecedented and by far surpasses the generous loans extended by DLF, a private sector corporate house, to facilitate the staggering acquisitions of Robert Vadra (now reputedly holed up in Dubai).
The AICC loaned and wrote off the amount of Rs 90 crore plus to Young Indian, but Young Indian paid only Rs 50 lakhs for the entire transaction and became owner of the immense properties and estates of The Associated Journals Ltd.
Then, the objectives of Young Indian have nothing to do with journalism, which is the sole reason why the then Government allotted prime land to the publishing house. It stands to reason that if the publications are defunct and cannot be made viable, then the trust managing the same must be dissolved and the land returned to the Government.
If Rahul Gandhi has no intention of starting a new newspaper or magazine, or re-launching the National Herald and allied publications – which his staff reputedly asserted when asked by journalists who learnt that something was afoot in the trust – why has he acquired The Associated Journals Ltd and all its assets?
It may be pertinent to note that in The Associated Journals Ltd’s List of Shareholders and Debenture Holders 2008, the name of Rahul Gandhi has been inserted by hand at Page 49, with no shares or debentures allotted, and no other particulars given. In the List for 2011, Young Indian figures as the last entry, with the address N-125 Panchsheel Park, New Delhi-17, and the shares allotted are 9,02,16,898. Moti Lal Vora has signed this document in his capacity as managing director.
The whole thing reeks of crony capitalism and seems prima facie illegal. A public trust cannot be made private in this surreptitious manner.