Company which ED claims gave loan to Young Indian among search targets

“The raids were carried out after we learnt that YI had not only received money from Dotex, but also some accommodation entry firms which we suspect to be hawala transactions,” an ED official said.

It is alleged that in 2010, YI, which has Sonia Gandhi and Rahul Gandhi as major shareholders, acquired AJL and all its assets for pittance.

After the formation of YI, the AICC, which had allegedly given a loan of over Rs 90 crore to AJL, decided to assign the entire debt to the newly formed organisation. Young Indian paid just Rs 50 lakh for this acquisition.

The loan assigned to YI was converted into shares of AJL and AJL allotted 9,02,16,899 equity shares to

Young Indian in lieu of aforesaid loan amount. In this manner, almost 99.99% shares of AJL were transferred to Young Indian.

Interestingly, at the time of AJL’s acquisition, Young Indian, incorporated with a paid up capital of Rs 5 lakh, did not have even the Rs 50 lakh funds to acquire AJL. It, thus, decided to take loan of Rs 1 crore from M/s. Dotex Merchandise Pvt. Ltd, Kolkata. In a report, the Income Tax Department which first probed the case, said that Dotex “was a company engaged in providing hawala transactions, by laundering of Appellant’s (YI’s) own money”.

“This loan of Rs. 1 crore was also flagged as suspicious transaction in the Suspicious Transactions Report (“STR”) by Financial Intelligence Unit (“FIU”), India. The amount of loan entry of Rs. 90.21 crore was fixed in order to ensure that the amount was just sufficient to allot 99% share of AJL to the Appellant (YI),” the report had said.

The IT Department had said that this loan was given to YI “without any guarantee”. It said YI had made a provision for payment of interest of Rs 1,72,603 on this loan in its balance sheet for the year ending on March 31, 2011.

“Apparently, no TDS has been applied on such payment. Perusal of Return of Young Indian filed with ROC for F.Y. 2013-14 shows unsecured loan of Rs. 1 crore from M/s Dotex Merchandise Pvt. L.td. is standing as it is and it has not been repaid. As per Note-6 of Balance sheet of Young Indian for the year ending on 31.03.2014, even provision for interest to be paid on unsecured loan has not been made for the FY 2013-14. This shows unsecured loan of Rs 1 crore is an accommodation entry which has neither been repaid nor any interest paid on it,” the IT Department had said.

ROC documents show that at the time of its incorporation, Akash Jaiswal was made the director of Dotex in November 2005. In October, 2011, Shashwat Goenka of the RPSG Group was appointed as director. He resigned in March, 2012. Hemant Goenka, also from the RPSG Group, and Sunil Bhandari are currently the directors of the company.

An email sent to Dotex Merchandise did not elicit any response.

Notably, both IT and ED have raised doubts over the Rs 90 crore loan forwarded by AICC to AJL saying there was no evidence to show this loan was ever given to AJL.