ED Confirmed for Seizure of National Herald Assets Worth Rs 752 Crore

In a significant development on Wednesday, the PMLA Adjudicating Authority has authorized the Enforcement Directorate (ED) to seize assets valued at approximately Rs 752 crore belonging to the Congress party-promoted National Herald newspaper. This decision comes as an affirmation of a previous freezing order on these properties issued last year. The authority has determined that the attached movable assets and equity shares are indeed proceeds of crime, directly associated with money laundering activities.

The ED is now set to take control over various assets including the notable Herald House located at ITO in Delhi, along with land and buildings in Mumbai, Lucknow, and several other locations. The final transfer of these assets into ED's possession will occur post a trial court's ruling in favor of the prosecution ED. These properties were initially attached in November of the previous year under a provisional attachment order by the ED, as part of the Prevention of Money Laundering Act (PMLA) against Associated Journals Ltd. (AJL) and Young Indian (YI).

Published by AJL and owned by Young Indian Private Limited, the National Herald counts Congress leaders Sonia Gandhi and Rahul Gandhi among its majority shareholders, with each holding 38 per cent of its shares. The Congress party had previously criticized this move by the ED as an act of vendetta and labeled the ED as a collaborator with the BJP. The agency, in its statement, accused AJL office-bearers and the party of deceiving shareholders and donors of the Congress.

According to the ED's investigation, AJL is found to possess illegal gains in the form of immovable properties across India's major cities like Delhi, Mumbai, and Lucknow amounting to Rs. 661.69 crore. Similarly, Young Indian is implicated for holding illegal gains worth Rs. 90.21 crore through investments in AJL's equity shares. The case has seen high-profile interrogations including Congress president Mallikarjun Kharge, and leaders Pawan Bansal, D K Shivakumar (Karnataka deputy chief minister), and his brother D K Suresh.

The origins of this money laundering case trace back to a court order from the Metropolitan Magistrate of Delhi on June 26, 2014, which acknowledged allegations of irregularities within the National Herald's operations. The court identified prima facie offences by seven accused persons/entities including Young Indian, involving criminal breach of trust among other charges.

The ED alleges that a criminal conspiracy was devised to acquire AJL properties worth hundreds of crores through Young Indian, which was essentially a special purpose vehicle for this acquisition. Despite being allocated land at concessional rates for newspaper publishing, AJL ceased its publishing operations in 2008 and shifted towards commercial utilization of these properties.

The agency further highlighted that AJL was supposed to repay a loan of Rs 90.21 crore to the All India Congress Committee (AICC), which was instead written off as non-recoverable and sold to Young Indian for Rs 50 lakh without any clear means to repay even this reduced amount. This action led to allegations of cheating against AJL shareholders and Congress donors by AJL office bearers and the party itself.

Following the acquisition of AICC's loan by Young Indian, a demand was made for either repayment or allotment of AJL's equity shares to Young Indian. Subsequently, an Extraordinary General Meeting (EGM) was convened where a resolution was passed to increase share capital and issue new shares worth Rs 90.21 crore to YI. This move drastically reduced the shareholding percentage of over 1,000 shareholders to a mere 1 per cent, effectively making AJL a subsidiary company of YI and granting it control over AJL's properties.