‘National Herald’ case: Cash trail could cost Gandhis dearly

New Delhi: In spite of all the bravado and political slugfest targeting the ruling Bharatiya Janata Party (BJP) and prime minister Narendra Modi, Congress party president Sonia Gandhi and her son, Rahul, who appeared before the court on Saturday in connection with the National Herald case, could be in trouble.

Senior legal counsels in the national capital point out that cash transaction — the Rs5 million (Dh276,954) loan given by the Congress party to a business entity — is legally untenable.

“The money that the Congress party had given as loan was received from donations to run a political outfit, for which it gets Income Tax exemption. That money cannot be used to fund a business entity and transferred the majority of the company shares in the name of two individuals,” Subrata Chatterjee, a legal counsel in the Supreme Court, said.

Dr Abhishek Manu Singhvi, who represented the Gandhis in court, argued, “Once somebody donates the money he or she cannot dictate the terms of its usage. Also what is wrong in holding the investments of the party in the name of its president and vice-president?”

Singhvi also argued that it is a section 25 company where no shareholder earns money as dividend and the profits are used for charitable reasons as decided by the board. “Company formed under Section 25 is like any other company where the directors can book expenses, and can also sell its shares at a profit where the buyer will certainly take into consideration the value of the assets the company owns,” Chatterjee said.

“Most of the assets are leasehold, how can you sell them?” said Congress spokesperson Sanjay Jha. “A newspaper does not run on love and fresh air; it needs money. There is an esteemed newspaper, which mostly runs from the money it earns by leasing properties in Mumbai,” he added.

However, documents seen by Gulf News prove that close to 70 per cent of the properties with the Associated Journals Ltd (AJL) are freehold. Jha, was, of course, referring to the Indian Express, but in that case, there is a fully fledged newspaper with substantial circulation and revenue from advertisements. National Herald was shut down in 2008.

Subramanian Swamy, who is the primary complainant in the case, said that the whole thing was done so that the Gandhi’s could indirectly own properties worth Rs20 billion by paying just Rs5 million — using money donated by public.

“The courts have rightly observed that there was criminal intent in the way thing were done in AJL. If there was no merit in the case, then the courts could have squashed it. Contrary to that view, both the trial court and high court have rejected the notion that it is a case of personal malice against the Gandhis. In fact, the whole country is happy that I brought them to court. The Gandhi’s have not been exonerated. This is a victory for democracy,” Swamy said to Gulf News.

“This is not only a fight for justice, but to tell the entire nation that they [Gandhi’s] are not above law,” Swamy added.

“The claim of political vendetta and involvement of prime minister’s office is completely untrue. The income-tax notice that was served to them was in January 2014, when UPA was in power and Congress leaders were claiming that a chaiwalla (tea-seller) cannot become the prime minister of India,” BJP National Spokesperson Nalin Kohli said.