National Herald Case – Sequence of Events

National Herald Case – Sequence of Events

1.     National Herald newspaper was started in 1937.

2.     It was owned by Associated Journals Limited (AJL), a public limited company.

3.     Publication of this newspaper was stopped in 2008, due to financial constraints.

4.     At this point, Congress Party extends ‘interest free’ loan of Rs.90 crores to AJL.

5.     This amount was utilized by AJL, to clear the outstanding debts and it becomes a ‘Zero Debt Company’.

6.     But, the company is unable to repay the debt of Rs.90 crores taken from Congress. 

7.     In the meantime, a non-profit making company ‘Young Indian Limited’ (YIL) was started in 2010.

8.     In this company, Sonia Gandhi and Rahul Gandhi hold a share of 38% each. The balance shareholding of 24% is held by other congress office bearers and those who are loyal to Gandhi family.

9.     Congress Party assigns the debt of Rs.90 crores of AJL to YIL, in exchange for a payment of Rs.50 lakhs.

10.  Now, AJL owes Rs.90 crores to YIL.

11.  AJL converts this debt into equity, by allotting 9 crore shares of Rs.10 each to YIL.

12.  And in the process, all the existing shareholders of AJL are reduced to minority status.

13.  But, all the existing shareholders of AJL were not given notice of conversion of debt into equity and allotment of additional 9 crore shares to YIL.

14.  The Extraordinary General Meeting for this purpose takes place at the government allotted residence of Sonia Gandhi.  With the minority shareholders of AJL, Congress completes the formality of allotment of additional shares.

15.  Consequent on this, YIL becomes the majority shareholder in AJL, as its shareholding touches 99% and AJL eventually becomes a subsidiary of YIL.

16.  Now, hold your breath. Congress Party writes off the debt of Rs.90 crores in the name of AJL in its books.

17.  Thus, YIL acquires all the assets in the name of AJL. 

18.  The present market value of immovable properties of AJL is said to be Rs.5,000 crores.

19.  Thus, by paying a mere Rs.50 lakhs, YIL has usurped the properties worth Rs.5,000 crores which rightfully belonged the shareholders of AJL on its rolls before November, 2010.

20.  The shareholders of AJL do not receive any compensation, because technically speaking AJL was not liquidated so that its assets could be sold and amount distributed to its shareholders.

21.  Rahul Gandhi in his interview to Pioneer magazine has openly admitted that Congress has no intention of reviving National Harold.

Issues raised now

1.     Congress party which mobilizes most of its funds through donations from the public, shall not lend a huge amount of Rs.90 crores to a commercial entity, because all its receipts are exempt from Income Tax.

2.     Both AJL and YIL are controlled by Gandhi family and those who are close to them, with 4 persons remaining directors of both the companies.

3.     Rahul Gandhi did not declare his 38% shareholding in YIL in his election affidavit (no information is available with regard to Sonia Gandhi’s election affidavit).

4.     While allotting fresh shares to YIL, AJL did not intimate all its shareholders and obtain their consent.

5.     By paying a mere Rs.50 lakhs, YIL has become owner of properties worth Rs.5,000 crores through illegal means.

6.     YIL which is now a ‘Non Profit Making Company’ under Sec. 25 of Companies Act may become a commercial enterprise under Sec.8 of the Act any time in future and there is no legal restraint whatsoever.

7.     Thus, the properties worth Rs.5,000 crores were acquired fraudulently by one family, with the help of persons loyal to it.

Date: 12-12-2015                                                                                                                                          pannvalan