Hindu Vivek Kendra
A RESOURCE CENTER FOR THE PROMOTION OF HINDUTVA
   
 
 
«« Back
 
Did Cong tell us full truth on Rs 90-cr loan to Sonia-Rahul firm?

Author: Raman Kirpal
Publication: Firstpost.com
Date: November 6, 2012
URL: http://www.firstpost.com/india/did-cong-tell-us-full-truth-on-rs-90-cr-loan-to-sonia-rahul-firm-516100.html

On 3 November, Congress General Secretary Janardhan Dwivedi claimed that the Rs 90 crore loan given to Associated Journals Ltd (AJL) — now a subsidiary of a non-profit company owned by Sonia Gandhi and her son Rahul — was to enable AJL to pay off its liabilities and revive its defunct newspapers, including National Herald and Qaumi Awaaz.

Last Friday, Dwivedi said in a signed statement: “The Indian National Congress has done its duty in supporting the Associated Journals to help initiate a process to bring the newspaper back to health in compliance with the laws of the land.”

The next day, PTI quoted him as explaining what the money was used for. “400 people working in the Associated Journals had become homeless while 300 workers in its Lucknow office had lost their jobs. We are proud that not only the salary dues of these 700 employees were paid off but even the VRS was given with all the benefits to those who opted for it and their provident funds were also paid.”

The evidence on record, however, suggests that the money could not really have gone to pay workers’ dues, or even to revive the newspapers. The money was simply given indirectly to Young Indian, the section 25 (non-profit) company 76 percent owned by Sonia and son, to enable them to take over Associated Journals (as Firstpost noted yesterday).

On 26 February 2011, the All India Congress Committee’s Rs 90-and-odd crore gift to Associated Journals was essentially handed over to Young Indian to acquire Associated Journals — which had lots of prime property assets.

Contrary to Dwivedi’s claim that the Rs 90 crore was meant to help revive National Herald and Qaumi Awaaz and pay pending dues to 700 employees, the loan was given to AJL and then converted to equity shares which were then acquired by Young Indian for Rs 50 lakh.

This how it happened. Once the loan was given, Motilal Vora, AICC Treasurer and one of the three directors of Associated Journals, got it converted to equity. The loan then went into Young Indian’s books.

Seeking the board of directors’ approval for issuance of 9.02 crore shares to Young Indian, Motilal Vora said: “9,02,16,898 equity shares of Rs 10 each be allotted to Young Indian in consideration of the extinguishment of the amount of Rs 90,21,68,980 due to Young Indian under loan facility available by the company from All India Congress Committee which loan facility and all the benefits thereunder was subsequently transferred by the All India Congress Committee in favour of Young Indian which was approved by the board in the board meeting held on 21.12.2010 and by the shareholders by a special resolution in the extraordinary general meeting of the members held on 21.01.2011.’’

Young Indian obliged and readily took over the loan of Rs 90 crore from Associated Journals in order to acquire it. This money is unlikely to have been used to pay the dues to employees of National Herald and Qaumi Awaaz.

Reason: their dues were largely settled much earlier.

Delhi Union of Journalists (DUJ) President SK Pande told Firstpost: “I remember that we had the last demonstration in support of National Herald and Qaumi Awaaz about four or five years ago. The Associated Journals management had then begun the negotiations.’’

Nearly 70 percent of National Herald and Qaumi Awaaz employees had already taken voluntary retirement by then. The Young Indian deal was clinched in February 2011. It is highly unlikely that Associated Journals had even 100 employees on its rolls in 2008.

 

However, the DUJ President said he would meet the labour ministers of Delhi and the Union government to find out the status of Associated Journals’ employees.

Noted lawyer Shanti Bhushan told Firstpost that AICC would not have done anything wrong if it had given Rs 90 crore to acquire Associated Journals. “But here the money is given to a private company where Sonia Gandhi and her son Rahul Gandhi hold 38 percent shares each (76 percent together). This gives the Gandhi family the virtual power to have perpetual control over the utilisation of Associated Journals’ properties.’’

Motilal Vora, who was instrumental in the deal, had a mere 0.001 percent shares in Associated Journals. In Young Indian, however, he and his Congress colleague Oscar Fernandes have 12 percent shares each.

According to a 2011 list of shareholders, Associated Journals had a total of 9.11 crore ordinary shares. Young Indian has a little over nine crore shares of Associated Journals.

Even in the remaining 11 lakh shares, the Gandhi family owns over three lakh shares in their individual capacities. Priyanka Vadra and Rahul Gandhi own 2,62,411 and 47,513 shares respectively as trustees and authorised attorneys of Janhit Nidhi (Regd) Public Trust.

Strangely, Young Indian maintains that the acquisition of Associated Journals should not be treated as an investment. “…Even if shares were to be treated as an asset (investment), having regard to the fact that the net worth of the said company (Associated Journals) is negative, recognising the entire cost as diminution in value would result in an equivalent charge to the income and expenditure account’’, argues Young Indian in its annual disclosure.

The only defence that Sonia Gandhi and Rahul for their acquisitive manoeuvres with Associated Journals is that even as directors of Young Indian, they are not entitled, directly or indirectly, to any commercial gains.

But Associated Journals now owns prime properties in several Congress-ruled states and Sonia and Rahul have full control over the utilisation of these properties.
 
«« Back
 
 
 
  Search Articles
 
  Special Annoucements