Full text of court order: http://www.scribd.com/doc/231412621/National-Herald-Order-June-26-2014
Dummy's guide to National Herald case.
Stale case? Read on Abhishek Manusinghvi ji.
http://blogs.timesofindia.indiatimes.com/headon/what-they-don-t-teach-you-at-harvard-business-school/
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Metropolitan Magistrate Gomati Manocha issued summons to Sonia and Rahul Gandhi besides AICC Treasurer Moti Lal Vohra, General Secretary Oscar Fernandes, and Suman Dubey and Sam Pitroda, the other directors of Young Indian Ltd (YI), a company that was incorporated in 2010 and which took over the "debt" of Associated Journals Ltd (AJL), the publisher of National Herald.
Swamy had accused Sonia and Rahul Gandhi and others of conspiring to cheat and misappropriate funds by just paying Rs.50 lakh by which YI obtained the right to recover Rs.90.25 crore which the AJL had owed to the Congress party.
"Complainant has established a prima facie case against the accused under section 403 (dishonest misappropriation of property, 406 (criminal breach of trust) and 420 (cheating) read with section 120B (criminal conspiracy) of IPC.
"Hence, let the accused Sonia Gandhi, Rahul Gandhi, Moti Lal Vohra, Oscar Fernandes, Suman Dubey and Sam Pitroda be summoned for August 7, 2014. Let the Young Indian be summoned through it's authorised representative for the same date," said Manocha.
Reacting to the development, Congress spokesman and a senior lawyer Abhishek Manu Singhvi said the party will respond "vigorously" to the allegations made by Swamy.
"Dr Swamy is known for his personal, motivated campaign against the Congress and you can take it that as and when we receive the papers and take the full legal advice a very vigorous response will be filed in respect of this completely false and motivated complaint.
"Issuance of process over a stale complaint made a year ago is not something to be excited about. Let's seek comprehensive legal advice and you will see how all allegations are legally demolished," Singhvi said.
The court, in its order, said, "From the complaint and the evidence led so far, it appears that YI was in fact created as a sham or a cloak to convert public money to personal use or as a special purpose vehicle for acquiring control over Rs 2000 crores worth of assets of The Associated Journals Ltd.(AJL).
"Since all the accused persons have allegedly acted in consortium with each other to achieve the said nefarious design, there are sufficient grounds for proceeding against all of them," the court said.
It said the accused Sonia Gandhi, Rahul Gandhi, Moti Lal Vohra, Oscar Fernandes were the office bearers and trustees of the funds of the Congress party and the funds of the party were not the personal property of the accused.
"The funds entrusted to them by the party were to be utilised to advance the purposes for which the Congress party was formed.
"These funds could not have been advanced in the form of an interest-free loan to AJL, as no provisions exists in the Representation of the People Acts or the constitution of the party permitting grant of any such loan to a company engaged in commercial activities," the court said.
"The accused, prima facie appears to have committed criminal breach of trust on the existing share holders of AJL as well as against the company," it added.
The court further said that the accused appeared to have cheated the state exchequer as well by claiming tax exemption by showcasing the objective the donations, etc. Were sought by the Congress from the people and diverting those funds to commercial purposes.
Swamy, in his complaint, alleged that AJL was formally closed in 2008 as it was under a huge unpaid debt of around Rs 90 crores.
He alleged that on November 23, 2010 under the Companies Act Young Indian Pvt Ltd company was incorporated in which Sonia Gandhi and Rahul Gandhi owned 38 per cent shares each.
In December 2010, Swamy claimed, YI's board of directors passed a resolution to "own" AJL's outstanding debt and "admittedly obtained an unsecured zero interest loan from the Congress Party" for an equivalent amount to liquidate the debt.
Congress spokesperson Abhishek Manu Singhvi told CNN-IBN, "Charges against Sonia Gandhi and Rahul Gandh are baseless and motivated. We will put in a very specific and strong reply to Subramanian Swamy's allegations."
Apart from Sonia Gandhi and Rahul Gandhi, the court has also summoned five others.
The court also issued summons to Sam Pitroda, former advisor to prime minister Manmohan Singh on public information, infrastructure and innovation, who also headed the National Innovation Council, a think tank to analyse and help implement strategies for inclusive innovation during the UPA regime.
Former journalist Suman Dubey, who is close to the Gandhi family, was also summoned by the court.
The summons was issued on a private complaint filed by BJP leader Subramanian Swamy.
Speaking to reporters, Swamy said: "This is a fraud, criminal breach of trust as they have managed to misappropriate the fund of Rs. 2,000 crore rupees."
"It is important for the court to take the passports of Sonia Gandhi and her son Rahul Gandhi so that they do not run away from the country before the hearing in the court," added Swamy.
The National Herald newspaper was establised in 1938 by India's first prime minister Jawaharlal Nehru. It was shut down in 2008.
With IANS inputs
![A Delhi court has summoned Sonia Gandhi and Rahul Gandhi in connection with the national Herald scam.]( "A Delhi court has summoned Sonia Gandhi and Rahul Gandhi in connection with the national Herald scam.")
A Delhi court has summoned Sonia Gandhi and Rahul Gandhi in connection with the National Herald scam. “I have found prima facie evidence against all the accused. The court has directed them to appear before it August 7,” said Metropolitian magistrate Gomati Manocha, according to a report in Times of India.The court has also issued summons to Sam Pitroda and former journalist Suman Dubey.
Subramanian Swamy Once they appear they will have to take bail and deposit passport
Stale case? Read on Abhishek Manusinghvi ji.
What they don’t teach you at Harvard Business School
Question: how do you convert Rs.50 lakh into Rs.1,600 crore? You won’t get an answer from any of the learned professors at Harvard Business School. But you will if you hire a clever Indian chartered accountant.
Here’s how it goes. You run a political party. You accept “donations” from the public. Your audited balance sheets show that, between 2004-05 and 2010-11, you received Rs. 2,008 crore in donations – officially. As a political party you are exempt from all taxes – income-tax, service tax, capital gains tax.
So you have a fairly healthy corpus of reserves which you are supposed to use – as per Election Commission (EC) guidelines – strictly for “political” purposes.
So what do you do? Why, you go right ahead and give an unsecured loan of Rs. 90 crore from your political party’s healthy fund reserves, built through public donations, to a defunct newspaper publishing company.
This company, by sheer coincidence, has a debt of Rs. 90 crore. The loan from your party extinguishes that debt and makes the defunct newspaper publishing company debt-free and employee-free.
But does the defunct newspaper publishing company have any value? Well, it owns, among other assets, a large building in the heart of Delhi on land specifically granted to newspaper publishing companies to publish newspapers. The estimated value of the building? Rs.1,600 crore.
So, here we have a defunct newspaper publishing company which does not publish anything, much less a newspaper, with zero debt, zero employees, near-zero sundry expenses – and a building worth Rs. 1,600 crore.
Now what? Your clever Indian chartered accountant, not all those learned professors at Harvard Business School, provides the answer: float a new non-profit company to buy up the defunct company’s shares for a token Rs. 50 lakh.
Kosher? Absolutely.
Laws broken? Perhaps.
But it will take a decade or more to prove they were – if they were – and public memory is conveniently short.
But, your spokesmen say, the political party made “no commercial gain” from the Rs. 90-crore loan transaction. Exactly. The political party in fact made a commercial loss of Rs. 90 crore (the unsecured loan). The commercial gain was made by the new non-profit company which now owns a building valued at Rs. 1,600 crore, having paid just Rs. 50 lakh to buy 100% shareholding in the defunct newspaper publishing company.
Interestingly, 76% of the shares of this new asset-rich but non-profit company belong to two senior leaders of the party. Since the defunct newspaper publishing company was owned by dozens of now-deceased shareholders of the grand old party, should not the shares of the new non-profit company belong to the party as a cooperative rather than to a few individuals? Ah, but this is no ordinary political party. It’s a family enterprise.
What next? No newspaper is being published from the building. All staff have left. The building is empty. The clever Indian chartered account regards this as a criminal waste of real estate.
Rent it out, he says, and you do. The income after all can always be set off against expenditure designated under the head “charitable purposes” so that your balance sheet shows no profit. That takes care of the letter, if not the spirit, of the law.
Is renting space in your building illegal? It may not be if your new company has as one of its objectives in its Articles of Association the business of renting real estate. And if it doesn’t, it can always be appended later by your clever chartered accountant.
If, on the other hand, you now restart the paper, under media and political duress, all floors of the building will be needed for operations. Hundreds of retrenched staff will have to be re-hired. The current income from rent will vanish. Expenditure will spiral. Daily newspapers can lose as much as Rs. 100 crore a year. Another Rs. 90 crore debt write-off may be required in the near future. So restarting a newspaper under duress is a poor option, your chartered accountant tells you.
But what would the Harvard Business School professor, having heard both sides of the story, recommend you do?
Simple. Reverse the entire transaction, he’d say. Return the Rs. 90-crore unsecured loan to your political party. Restore ownership of the Rs. 1,600-crore building to the original defunct newspaper publishing company by transfering back to it the 100% shareholding your new non-profit company bought from it for Rs. 50 lakh.
If you do that, this episode will become required reading as a Harvard Business School case study titled: “How to place public interest above private interest”.
And if you don’t? You might well lose the next general election and have to restart the newspaper after all.
Follow @minhazmerchant on twitter
http://blogs.timesofindia.indiatimes.com/headon/what-they-don-t-teach-you-at-harvard-business-school/
SONIA, RAHUL SUMMONED AS ACCUSED IN NATIONAL HERALD CASE
Thursday, 26 June 2014 | PTI | New Delhi
Congress President Sonia Gandhi, and Vice President Rahul Gandhi were today summoned by a local court as accused in a criminal complaint lodged by BJP leader Subramanian Swamy for alleged cheating and misappropriation of funds in acquiring ownership of now-defunct daily National Herald.
Metropolitan Magistrate Gomati Manocha issued summons to Sonia and Rahul Gandhi besides AICC Treasurer Moti Lal Vohra, General Secretary Oscar Fernandes, and Suman Dubey and Sam Pitroda, the other directors of Young Indian Ltd (YI), a company that was incorporated in 2010 and which took over the "debt" of Associated Journals Ltd (AJL), the publisher of National Herald.
Swamy had accused Sonia and Rahul Gandhi and others of conspiring to cheat and misappropriate funds by just paying Rs.50 lakh by which YI obtained the right to recover Rs.90.25 crore which the AJL had owed to the Congress party.
"Complainant has established a prima facie case against the accused under section 403 (dishonest misappropriation of property, 406 (criminal breach of trust) and 420 (cheating) read with section 120B (criminal conspiracy) of IPC.
"Hence, let the accused Sonia Gandhi, Rahul Gandhi, Moti Lal Vohra, Oscar Fernandes, Suman Dubey and Sam Pitroda be summoned for August 7, 2014. Let the Young Indian be summoned through it's authorised representative for the same date," said Manocha.
Reacting to the development, Congress spokesman and a senior lawyer Abhishek Manu Singhvi said the party will respond "vigorously" to the allegations made by Swamy.
"Dr Swamy is known for his personal, motivated campaign against the Congress and you can take it that as and when we receive the papers and take the full legal advice a very vigorous response will be filed in respect of this completely false and motivated complaint.
"Issuance of process over a stale complaint made a year ago is not something to be excited about. Let's seek comprehensive legal advice and you will see how all allegations are legally demolished," Singhvi said.
The court, in its order, said, "From the complaint and the evidence led so far, it appears that YI was in fact created as a sham or a cloak to convert public money to personal use or as a special purpose vehicle for acquiring control over Rs 2000 crores worth of assets of The Associated Journals Ltd.(AJL).
"Since all the accused persons have allegedly acted in consortium with each other to achieve the said nefarious design, there are sufficient grounds for proceeding against all of them," the court said.
It said the accused Sonia Gandhi, Rahul Gandhi, Moti Lal Vohra, Oscar Fernandes were the office bearers and trustees of the funds of the Congress party and the funds of the party were not the personal property of the accused.
"The funds entrusted to them by the party were to be utilised to advance the purposes for which the Congress party was formed....
"These funds could not have been advanced in the form of an interest-free loan to AJL, as no provisions exists in the Representation of the People Acts or the constitution of the party permitting grant of any such loan to a company engaged in commercial activities," the court said.
"The accused, prima facie appears to have committed criminal breach of trust on the existing share holders of AJL as well as against the company," it added.
The court further said that the accused appeared to have cheated the state exchequer as well by claiming tax exemption by showcasing the objective the donations, etc. Were sought by the Congress from the people and diverting those funds to commercial purposes.
Swamy, in his complaint, alleged that AJL was formally closed in 2008 as it was under a huge unpaid debt of around Rs 90 crores.
He alleged that on November 23, 2010 under the Companies Act Young Indian Pvt Ltd company was incorporated in which Sonia Gandhi and Rahul Gandhi owned 38 per cent shares each.
In December 2010, Swamy claimed, YI's board of directors passed a resolution to "own" AJL's outstanding debt and "admittedly obtained an unsecured zero interest loan from the Congress Party" for an equivalent amount to liquidate the debt.
Sonia, Rahul Summoned As Accused in National Herald Case
| Congress President Sonia Gandhi, and Vice President Rahul Gandhi were today summoned by a local court as accused in a criminal complaint lodged by BJP leader Subramanian Swamy for alleged cheating and misappropriation of funds in acquiring ownership of now-defunct daily National Herald. |
Metropolitan Magistrate Gomati Manocha issued summons to Sonia and Rahul Gandhi besides AICC Treasurer Moti Lal Vohra, General Secretary Oscar Fernandes, and Suman Dubey and Sam Pitroda, the other directors of Young Indian Ltd (YI), a company that was incorporated in 2010 and which took over the "debt" of Associated Journals Ltd (AJL), the publisher of National Herald.
Swamy had accused Sonia and Rahul Gandhi and others of conspiring to cheat and misappropriate funds by just paying Rs.50 lakh by which YI obtained the right to recover Rs.90.25 crore which the AJL had owed to the Congress party.
"Complainant has established a prima facie case against the accused under section 403 (dishonest misappropriation of property, 406 (criminal breach of trust) and 420 (cheating) read with section 120B (criminal conspiracy) of IPC.
"Hence, let the accused Sonia Gandhi, Rahul Gandhi, Moti Lal Vohra, Oscar Fernandes, Suman Dubey and Sam Pitroda be summoned for August 7, 2014. Let the Young Indian be summoned through it's authorised representative for the same date," said Manocha.
Reacting to the development, Congress spokesman and a senior lawyer Abhishek Manu Singhvi said the party will respond "vigorously" to the allegations made by Swamy.
"Dr Swamy is known for his personal, motivated campaign against the Congress and you can take it that as and when we receive the papers and take the full legal advice a very vigorous response will be filed in respect of this completely false and motivated complaint.
"Issuance of process over a stale complaint made a year ago is not something to be excited about. Let's seek comprehensive legal advice and you will see how all allegations are legally demolished," Singhvi said.
The court, in its order, said, "From the complaint and the evidence led so far, it appears that YI was in fact created as a sham or a cloak to convert public money to personal use or as a special purpose vehicle for acquiring control over Rs 2000 crores worth of assets of The Associated Journals Ltd.(AJL).
"Since all the accused persons have allegedly acted in consortium with each other to achieve the said nefarious design, there are sufficient grounds for proceeding against all of them," the court said.
It said the accused Sonia Gandhi, Rahul Gandhi, Moti Lal Vohra, Oscar Fernandes were the office bearers and trustees of the funds of the Congress party and the funds of the party were not the personal property of the accused.
"The funds entrusted to them by the party were to be utilised to advance the purposes for which the Congress party was formed.
"These funds could not have been advanced in the form of an interest-free loan to AJL, as no provisions exists in the Representation of the People Acts or the constitution of the party permitting grant of any such loan to a company engaged in commercial activities," the court said.
"The accused, prima facie appears to have committed criminal breach of trust on the existing share holders of AJL as well as against the company," it added.
The court further said that the accused appeared to have cheated the state exchequer as well by claiming tax exemption by showcasing the objective the donations, etc. Were sought by the Congress from the people and diverting those funds to commercial purposes.
Swamy, in his complaint, alleged that AJL was formally closed in 2008 as it was under a huge unpaid debt of around Rs 90 crores.
He alleged that on November 23, 2010 under the Companies Act Young Indian Pvt Ltd company was incorporated in which Sonia Gandhi and Rahul Gandhi owned 38 per cent shares each.
In December 2010, Swamy claimed, YI's board of directors passed a resolution to "own" AJL's outstanding debt and "admittedly obtained an unsecured zero interest loan from the Congress Party" for an equivalent amount to liquidate the debt.
FILED ON: JUN 26, 2014 17:30 IST
Published: June 26, 2014 15:26 IST | Updated: June 26, 2014 17:55 IST
Delhi court summons Sonia, Rahul in National Herald case
![File photo shows a copy of National Herald dated November 4, 1978 on display at an exhibition in Mangalore. Photo: R.Eswarraj]( "File photo shows a copy of National Herald dated November 4, 1978 on display at an exhibition in Mangalore. Photo: R.Eswarraj")
File photo shows a copy of National Herald dated November 4, 1978 on display at an exhibition in Mangalore. Photo: R.Eswarraj![Congress president Sonia Gandhi and vice-president Rahul Gandhi addressing a press conference in New Delhi. File photo]( "Congress president Sonia Gandhi and vice-president Rahul Gandhi addressing a press conference in New Delhi. File photo")
The HinduCongress president Sonia Gandhi and vice-president Rahul Gandhi addressing a press conference in New Delhi. File photo
A Delhi court has summoned Congress president Sonia Gandhi and vice president Rahul Gandhi and other Congress leaders as accused in National Herald newspaper case filed on charges of criminal conspiracy and cheating.
Other senior leaders summoned include Motilal Vohra, Oscar Fernandes and Sam Pitroda. They have been asked to be present in the court on 7 August.
IANS adds
Former journalist Suman Dubey, who is close to the Gandhi family, was also summoned by the court.
The summons was issued on a private complaint filed by BJP leader Subramanian Swamy.
Speaking to reporters, Dr. Swamy said: “This is a fraud, criminal breach of trust as they have managed to misappropriate the fund of Rs. 2,000 crore rupees.”
“It is important for the court to take the passports of Sonia Gandhi and her son Rahul Gandhi so that they do not run away from the country before the hearing in the court,” added Dr. Swamy.
The National Herald newspaper was established in 1938 by India’s first prime minister Jawaharlal Nehru. Rahul Gandhi is Nehru’s great grandson of Nehru. The newspaper was shut down in 2008.
Published: June 20, 2014 02:23 IST | Updated: June 20, 2014 09:20 IST
Swamy seeks probe into ‘take over’ of Associated Journals
![]()
The Hindu![Dr. Subramanian Swamy]( "Dr. Subramanian Swamy")
The HinduDr. Subramanian Swamy
BJP leader Subramanian Swamy has written to Finance Minister Arun Jaitley, urging an Income Tax investigation into the role of senior Congress leaders in the alleged take over of Associated Journals Pvt. Ltd, “publishers and printer of the National Herald newspaper,” and “illegal use” of Herald House, a multi-story property, for private rental purposes.
“The Congress party extended a loan of Rs. 90 crore or more in 2011 to the Associated Journals Pvt. Ltd with the express condition that this loan will be utilised to write off the accumulated debt of Associated Journals Pvt. Ltd and thereby make it possible to re-start the printing of the newspaper National Herald (which had been shut down in 2008),” Dr. Swamy said in his recent letter.
Meanwhile, Dr. Swamy alleged that ‘Young Indian’, a “private limited company, proposed to own the Associated Journals Pvt. Ltd debt of Rs. 90-plus crore in return for the transfer of 99.1 per cent of its shares to it.”
He alleged that Congress chief Sonia Gandhi and her son Rahul Gandhi, the party's vice-president, have 76 per cent shares in ‘Young Indian.’ With the alleged transfer, Dr. Swamy contended, they became “owners of the Associated Journals Pvt. Ltd having unfettered ownership of Rs. 2000 crore or more of immovable property.”
Invoking Section 13A of the Income Tax Act and Section 29 of the Representation of the People Act, which requires complete transparency in financial transactions of a political party, Dr. Swamy sought a search of the premises of the Herald House in Delhi's Bahadur Shah Zafar Marg.
“A cursory inspection of the Herald House in Bahadur Shah Zafar Marg shows that the House which was built on leased land for printing of the newspaper, is now being put up for rent for private use,” he alleged.
Noting that he would be approaching the court, Dr. Swamy said: “In the exclusive issue of Income Tax Act, I am urging you to direct the investigation of fraud and cheating under the Income Tax Act and any other law you may think appropriate in this matter.”
http://www.thehindu.com/news/national/swamy-seeks-probe-into-take-over-of-associated-journals/article6130971.ece
National Herald case: Charges against Sonia, Rahul motivated, says Cong
by Jun 26, 2014
After a Delhi court Thursday issued summons to Congress chief Sonia Gandhi and her son and party vice-president Rahul Gandhi for misappropriating the funds of the National Herald newspaper that was shut down some years ago, the party denied the allegations, calling them motivated.
Congress spokesperson Abhishek Manu Singhvi told CNN-IBN, "Charges against Sonia Gandhi and Rahul Gandh are baseless and motivated. We will put in a very specific and strong reply to Subramanian Swamy's allegations."
]![Sonia Gandhi and Rahul Gandhi. PTI]()
Sonia Gandhi and Rahul Gandhi. PTI
"Subramanian Swamy is known for his anti-Congress campaign," Singhvi added.
Sonia Gandhi and Rahul Gandhi. PTIApart from Sonia Gandhi and Rahul Gandhi, the court has also summoned five others.
The court also issued summons to Sam Pitroda, former advisor to prime minister Manmohan Singh on public information, infrastructure and innovation, who also headed the National Innovation Council, a think tank to analyse and help implement strategies for inclusive innovation during the UPA regime.
Former journalist Suman Dubey, who is close to the Gandhi family, was also summoned by the court.
The summons was issued on a private complaint filed by BJP leader Subramanian Swamy.
Speaking to reporters, Swamy said: "This is a fraud, criminal breach of trust as they have managed to misappropriate the fund of Rs. 2,000 crore rupees."
"It is important for the court to take the passports of Sonia Gandhi and her son Rahul Gandhi so that they do not run away from the country before the hearing in the court," added Swamy.
The National Herald newspaper was establised in 1938 by India's first prime minister Jawaharlal Nehru. It was shut down in 2008.
With IANS inputs
http://www.firstpost.com/politics/national-herald-case-charges-sonia-rahul-motivated-says-cong-1590267.html?utm_source=FP_TOP_NEWS
Sonia, Rahul and the National Herald scam: Niti Central Impact
A Delhi court has summoned Sonia Gandhi and Rahul Gandhi in connection with the national Herald scam.
Niti Central was the only media outlet to have pursued this issue after the case first surfaced. Get a perspective on the matter with features from our archive.
______________
http://www.niticentral.com/2014/06/26/niti-central-impact-sonia-rahul-and-the-national-herald-scam-232288.html