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National Herald case: We are being prosecuted, says Kapil Sibal

"AJL is also Congress. Thirty per cent of AJL is owned by trusts controlled by Congressmen. The Gandhis don't get anything. Nothing comes to the shareholders of YIL," says Kapil Sibal on National Herald case.

national herald case, sonia gandhi, rahul gandhi, national herald gandhi, national herald sonia rahul, kapil sibal, AJL, YIL, Congress, Subramanian Swamy, india news, latest news Senior Congress leader Kapil Sibal  (Source: Express file photo by Anil Sharma)

In an interview to MANEESH CHHIBBER, senior lawyer KAPIL SIBAL says the NDA government and Subramanian Swamy are working in tandem to eliminate the Congress leadership, and that there is nothing criminal or unethical in AJL-YIL deal. Excerpts

Why was Young Indian Limited (YIL) formed? Was there a conspiracy as the complainants, including Subramanian Swamy, allege?

Certainly not. There is a history behind it. It was formed because Associated Journals Ltd (AJL) was in deep financial crisis, and this did not happen overnight. For a long time National Herald was running losses, there was no means to pay employees, provident fund contributions couldn’t be made. But it had to be kept operational. Jawaharlal Nehru had once said he would rather sell Anand Bhawan than shut down National Herald. Such was the relationship between the Congress and the paper.

Wasn’t it strange that YIL, 76 per cent of whose stake is owned by Sonia Gandhi and Rahul Gandhi, assigned AJL’s debt of Rs 90 crore to the Congress party and within a month of YIL being incorporated, AJL becomes YIL’s fully-owned subsidiary and YIL became the owner of AJL’s real estate assets across the country?

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No. YIL is a Section 25 (of Companies Act) company. The shareholders of YIL don’t benefit, are entitled to nothing.

But tomorrow, there’s nothing to stop YIL from changing from a Section 25 company to a Section 8 company.

Not at all. We are subject to the conditions of the licence. We are talking about a complaint case not in the future but regarding the past. Even Swamy hasn’t made the allegation that either Mrs Gandhi or Rahul Gandhi or any other shareholder has got even one penny.


But why did YIL have to step in when AJL could have easily sold some of its assets to pay off the debt to the Congress? The complaint says AJL has assets worth over Rs 2,000 crore across the country.

This is completely wrong. All that AJL owns is in Lucknow. All others are leased properties, leased by the government, and AJL or YIL can’t sell them.

So if there is any violation, the respective government that gave the property can take it back?

Yes. Provided we violate the terms of allotment.


Who gets the rent from the Bahadur Shah Zafar Marg building, a major portion of which is rented out to the Ministry of External Affairs?

AJL, of course.

But isn’t AJL now a subsidiary of YIL?

Absolutely. But shareholders don’t benefit from it.

In whose accounts does the rent go?


What stops YIL from taking this money, since AJL is its subsidiary?

The only income the AJL had at the time of the restructuring was probably a sum of Rs 7-10 lakh from the eye hospital in Lucknow. There were three vacant pieces of land in Patna, Panchkula and Mumbai, and notices were being given (by government agencies) as to why construction was not being done on these lands. And as for the leased properties, nobody could sell them, and with an income of about Rs 10 lakh, you expected National Herald to be revived.

So is there a plan to revive National Herald?

Of course there is.

But hasn’t Rahul Gandhi said he will never publish National Herald?

Completely wrong. Rahul said YIL has no intention of launching a newspaper. He never said AJL would never revive National Herald. That will happen.


Isn’t that what the controversy is about? For all practical purposes, aren’t YIL and AJL one and the same? Isn’t it unethical if not criminal?

We are being prosecuted. We’ll talk about the ethics later. Where is the criminal offence? Who has cheated who? Has a Congressman or a shareholder said he has been cheated?


From where did the money that the Congress lent to AJL come from?

From donors.

Isn’t there a law that prohibits such dealings by a political party?

Not at all. Show me such a law.


Even if there’s no law, isn’t there a question of breach of ethics?

Let’s either talk of criminality or ethics. The court isn’t going to go into ethics.

How can politics not be ethical?

We are being prosecuted for what is allegedly a criminal offence. Congress leaders are defending themselves in a criminal case. Isn’t it? If Swamy’s argument is that there is a criminal act, I would like to know which acts? There are three offences — criminal misappropriation, cheating and breach of trust. Now whose trust has been breached?

Nobody’s. If, for example, you donate something for Chennai flood relief, tomorrow you can’t say the donation has not been used in a particular manner. Trust only comes in when you entrust something with somebody. That is not the case here. As for cheating, have I made a misrepresentation knowingly to divest anybody of anything? Is there a cheater or a victim who has been cheated? If not, where is the criminal misrepresentation? And, if there is no breach of trust or cheating, there can’t be criminal misrepresentation.

Surely there is cheating since only 1 per cent of the total 1,057 shareholders of AJL were involved in the decision?

There were 761 shareholders of AJL, including former Union Home and Law Minister Kailash Nath Katju (grandfather of former Supreme Court judge Markandey Katju). We sent a notice to every shareholder and we have all the records. Rameshwar Thakur (former Union minister and Governor), Yashpal Kapoor (close aide of Indira Gandhi), G D Birla (industrialist) were shareholders. None of them or their successors was interested, because this was a defunct company. The point is the shareholder doesn’t object and Swamy does. Tomorrow, if RIL takes a decision and no shareholder objects, can Swamy object? Is it maintainable?

What about conflict of interest? Motilal Vora donning three hats to facilitate the deal — chairman and managing director of AJL, treasurer of the All India Congress Committee and now director of YIL.

Let’s talk of ethics now. The Congress party is controlled by Congressmen. AJL is controlled by Congressmen. And YIL is controlled by Congressmen. Where is the conflict of interest?

YIL is the Gandhi family. Was the matter ever discussed at the CWC?

AJL is also Congress. Thirty per cent of AJL is owned by trusts controlled by Congressmen. The Gandhis don’t get anything. Nothing comes to the shareholders of YIL.

What happens to the money you get from your properties, including the Rs 80-odd lakh from External Affairs Ministry for the Bahadur Shah Zafar Marg building in New Delhi?

AJL gets it. It is trying to build capital so that it can revive National Herald newspaper. Not a single paisa has come to the YIL shareholders. Shareholders get nothing since it is a Section 25 company.

But the perception is that it was unethical for the Congress to lend money to a company.

It is permitted under law. Why and how did BJP invest in Canstar Fund and earn dividend from it? The matter went to five-member bench of the Income Tax Tribunal. How could the BJP claim loss in a newspaper it was running? Why hasn’t Swamy gone to court against the BJP?

When is National Herald being published again?

As soon as this litigation ends (laughs).

This is a legal matter, so why is the Congress not allowing Parliament to function?

You are mixing two different matters. The issue in Parliament is not National Herald. Even before this government came, the current Prime Minister was talking of a Congress-Mukht Bharat. What did he mean? Elimination of the Congress party from the polity of this country. That is not a democratic statement. Now see the attempts being made to eliminate the Congress by foisting false cases on its leaders in the past year. Even in this case, Finance Minister (Arun Jaitley) said on August 5, 2014, in a TV interview that there is a prima facie case against the Gandhis. If the government of the day was not interested in targeting us, no Finance Minister would have made such a statement. When the ED didn’t want to issue a notice, the ED chief was changed. Even before the income tax notices could reach us, Swamy said in court that we would soon be getting I-T notices. The government and Swamy are working closely together to target our leaders. And this is not the only case.

What is the next course of action?

The counsel have already told the judge that the accused will appear in court on the next date.

First published on: 12-12-2015 at 01:21:35 am
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