As the scam-tainted UPA prepares to bow out of the office, it is to be hoped that the relevant administrative authorities will find the courage to scrutinise all business and real estate deals associated with the family of the Congress president. It may be recalled that the Aam Aadmi Party (AAP) made its political debut with an exposé of Sonia Gandhi’s son-in-law Robert Vadra’s cosy relationship with realty major DLF. On Monday, a television news channel ‘Times Now’ exposed a dodgy real estate deal in the vicinity of the Rashtrapati Bhavan. It is an Adarsh-style deal that should never have been cleared and that possibly benefitted from the acumen Vadra brings to projects he is associated with.

Ten years of Sonia Gandhi dominated UPA rule has made probity in public life the principal demand of the people. While umpteen scandals involving Government Ministries and Departments have come to light, one of the least reported and possibly most outrageous scandal is the surreptitious takeover of the prime properties of the National Herald, Navjivan and Qaumi Awaz by a closely held private company which is totally controlled by Sonia Gandhi and Rahul Gandhi.

The monetary value of the scam is estimated at over Rs 5000 crore, when calculated only in terms of real estate but it could be more once the full holdings of the National Herald is known. What’s pertinent is that the National Herald was set up wholly as an Indian-owned and financed newspaper 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 and after floundering for years, publication finally ceased to exist in 2008.

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 Press at below market prices to support their freedom, it should have been returned to the State. Instead, the ownership of properties in prime locations across the nation was spirited away into the private coffers of a family which is feeling insecure as the nation slips out of its grip.

In April 2012, a private company managed by Sonia Gandhi, Rahul Gandhi, Moti Lal Vora, Oscar Fernandes, Suman Dubey and Satyan G Pitroda took over the estate and properties of The Associated Journals Ltd by a circuitous route to recapitulate it. At the present market price, worth of the National Herald building on Bahadur Shah Zafar Marg alone would be several thousand crore. It was taken over for mere Rs 50 lakhs with the help of an ‘extinguished’ loan of over Rs 90 crore forwarded by the All India Congress Committee.

The prize acquisition was made without any tender or public notice by Young Indian(Registration no. 55-210686), a private company registered under section 25 of the Companies Act, 1956. Rahul Gandhi is a Director in this company and holds 76 per cent its shares together with his mother Sonia Gandhi. The aim of the company is to inculcate democratic and secular ideals in the youth. While driving along Bahadur Shah Zafar Marg, one can see that the said property is being used by the Ministry of External Affairs for its passport office; the monthly rental is said to be a handsome Rs. 60 lakh.

The whole transaction is fraudulent from beginning to end. The Associated Journals was started by Jawaharlal Nehru, Purushottamdas Tandon, J Narendra Deva, Kailash Nath Katju, Rafi Ahmad Kidwai, Mohan Lal Sakra and Krishna Dutta Paliwal in 1937 under the Indian Companies Act, 1913. It had a capital of Rs 5 lakhs divided into 2000 Preference Shares of Rs 100 each carrying a fixed but non-cumulative dividend of 5 per cent per annum and 30,000 ordinary shares of Rs 10 each. There were about 5000 odd shareholders.

Now their rights have covertly been given to a private firm managed by Sonia Gandhi and Rahul Gandhi by using funds from the AICC. There is no legality in a political party giving a loan – a huge unsecured loan – to a private person to set up a private firm. It is such a gross misuse of tax-exempt donations given to political parties to serve public purpose. It is a matter that the Election Commission and the Income Tax authorities should not ignore. Incidents like this support the case to bring political parties under the ambit of Right to Information Act, so that the public can learn about the use (or misuse) of party funds by individuals who control the levers of power in a party and are not accountable to ordinary party members.

The available information suggests that Young Indian took a loan of over Rs 90 crores owed by The Associated Journals Ltd. (to pay off staff) for a sum of Rs 50 lakhs. This was converted into 9,02,16,898 ordinary shares of Rs 10 each which were fully paid. The official address of Young Indian is 5A, Herald House, Bahadur Shah Zafar Marg, New Delhi –110002, that is, the official address of publications owned by The Associated Journals Ltd, the registered office of which is Nehru Bhawan, 1 Bisheshwar Nath Road, Lucknow, UP.

There was no general body meeting of shareholders to discuss and approve this huge gift of prime estate to a private firm. Moti Lal Vora, 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 All India Congress Committee. (The language is convoluted and intentionally so, because there is really no legal explanation for this transaction).

This loan facility and all benefits thereunder was approved by the board in a meeting held on December 21, 2010 and by the shareholders by a Special Resolution in the Extraordinary General Meeting of the members held on January 21, 2011. Accordingly, the AICC loaned and wrote off Rs 90 crores plus to Young Indian, but Young Indian paid only Rs 50 lakhs for the entire transaction and became owner of the vast estates of The Associated Journals Ltd.

This unedifying exercise has a long gestation period. The Associated Journals Ltd.’s List of Shareholders and Debenture Holders 2008 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; shares allotted are 9,02,16,898. Moti Lal Vora has signed this document in his capacity as Managing Director.

By 2011, the list of shareholders furnished to the Registrar of Companies included names of persons who were dead (about 80 per cent) and firms long defunct. Some prominent names include Jawaharlal Nehru of Anand Bhawan, Allahabad (died 1964), Rafi Ahmad Kidwai (d 1954), Feroze Gandhi (d 1960), Indira Nehru Gandhi (d 1984), Ghanshyam Das Birla (d 1983), NS Pandit and Vijay Lakshmi Pandit (died 1990), Kailash Nath Katju (d 1968), Dr Radha Kumud Mukherji, former Chief Justice of India Mirza Hameedullah Beg (d 1985), Yagya Dutt Sharma (d 1996), Sucheta Kripalani (d 1974), Yashpal Kapoor, Mohammed Yunus (d 2001), BRCC president Rajni Patel, Jitendra Prasad (d 2001), HY Sharda Prasad (d 2008), Lalit Suri (d 2006).

Remarkably, when these and other shareholders died, The Associated Journals did not pass on the shares to their legal heirs; this is a legal issue that the relevant authorities need to look into. Yet members of the Nehru-Gandhi family and their close associates somehow entered the shareholders list from time to time; Indira Gandhi, Feroze Gandhi and later their grandchildren. Some trusts like Rattan Deep Trust controlled by RD Pradhan, Rahul Gandhi and Janhit Nidhi controlled by Rahul Gandhi, Rameshwar Thakur, Priyanka Gandhi Vadera (spelling as per list) were involved in this business, the legality of which is questionable.