Explained: What is the National Herald money laundering case in which Rahul and Sonia Gandhi are named?

How did this case originate?

The case initially originated from a criminal complaint filed by the then BJP Rajya Sabha MP, Subramanian Swamy, in 2012 against the Gandhis and other leaders of the Congress party. He accused them of fraud in acquiring the property of Associated Journals Ltd (AJL).

AJL publishes the National Herald newspaper. It is controlled by Young Indian Private Limited, a not-for-profit company. Sonia and Rahul are the Young Indian’s majority shareholders (and directors) — they hold a 38% stake each.

After a trial court order allowed the Income Tax department to probe the affairs of National Herald and conduct a tax assessment of Sonia and Rahul, the ED got involved in the case.

What are the allegations?

In 2008, AJL stopped the publication of National Herald and other associated newspapers. As per the ED’s chargesheet, AJL owed a debt of Rs 90 crore to the Congress accumulated as a result of interest-free loans given to it by the party.

The Congress had given AJL loans, whose ideology it promoted, amid its financial struggles. To make it debt-free, the loan was transferred to Young Indian.

The ED alleged that a “criminal conspiracy was hatched” by the accused persons (Sonia, Rahul and others) to give control of properties worth hundreds of crores of AJL to the beneficial owners of Young Indian.

As per its chargesheet, Young Indian, which was incorporated in 2010, had the same set of people appointed as AJL. The Rs 90 crore loan was allegedly assigned to Young Indian for Rs 50 lakh by the same set of people who held positions in the two entities, it is learnt. This loan was then allegedly converted into equity, and Young Indian was allotted shares worth crores of AJL.

The ED outlined that this is how Young Indian allegedly got 99% equity of AJL, and assets worth hundreds of crores were allegedly transferred to the beneficial owners of Young Indian (Sonia and Rahul).

Both Sonia and Rahul were questioned in 2022 as part of the probe.

Earlier in April, the ED had served notices to take possession of immovable assets worth Rs 661 crore — in Delhi, Mumbai and Lucknow — that it had attached as part of the money laundering probe against AJL and Young Indian.

Other than the firms and the Gandhis, the ED has also named Congress leaders Suman Dubey and Sam Pitroda as accused in the case.

What did the Congress say?

Reacting to the development, Senior Congress leader and Rajya Sabha member Abhishek Manu Singhvi had earlier said: “… the National Herald case is a one-trick wonder where this government has started a money laundering investigation without there being any movement of money or property or any activity which caused a transfer. Merely, a not-for-profit company was created to manage the affairs of National Herald, where no dividends can be paid, and no commercial transactions take place. The mere creation of that company with Sonia Gandhi and other members of the Gandhi family or the late Mr Motilal Vohra has been treated as an act of money laundering.”

AICC general secretary in-charge (organisation) K C Venugopal had said the move “reeks of desperation from Prime Minister Narendra Modi and Home Minister Amit Shah, who are failing to address the concerns of the people and are looking to continuously create distraction after distraction”.

Congress leader Jairam Ramesh had posted on X: “The seizure of National Herald’s assets is a state-sponsored crime masquerading as the rule of law. The filing of a chargesheet against Sonia Gandhi, Rahul Gandhi and some others is nothing but an attempt at vendetta politics and intimidation by the Prime Minister and the Home Minister…”