Associated Journals Limited (AJL) received “bogus” advance rent worth ₹38.41 crore from various parties, some of which said they gave the money on the directions of senior Congress leaders, the Enforcement Directorate (ED) claimed to have found in its investigation into the AJL-Young Indian – National Herald case, according to the charge sheet filed last week before a Delhi court, people familiar with its contents said.
The charge sheet is not in the public domain yet, but names former Congress president Sonia Gandhi and leader of opposition in the Lok Sabha, Rahul Gandhi as accused.
The federal agency’s probe has also revealed that Young Indian Private Limited (YI) — a non-profit company in which Sonia and Rahul Gandhi together own 76% – received donations worth ₹18.12 crore from various persons or entities “which are not found to be genuine”, the people added, citing the charge sheet.
These donations were collected to discharge the income tax demand on YI, which would have otherwise fallen on the majority stakeholders , they said.
Hindustan Times has not seen a copy of the charge sheet, filed on April 9 under prevention of money laundering act (PMLA).
ED has alleged that Gandhis are the “beneficial owners” of all the properties of AJL – estimated to have current market value of ₹5,000 crore – after it was taken over in 2010-11 by YI.
The Congress has termed the charge sheet “political vendetta”.
Highlighting that the rent earned by AJL’s properties in Delhi, Mumbai, Lucknow and other cities is “proceeds of crime”, an ED officer said “AJL received ₹142 crore rent between 2010-11 and 2022-23, of which ₹58.79 crore was advance rent. After we carried out raids in the case on August 2, 2022, and carried out enquiries after that, it was revealed that out of ₹58.79 crore advance rent, ₹38.41 crore shown from various parties was not genuine”.
“There was no rent agreement from these parties. Some of these parties (who paid rent) were actually shell entities which means AJL d obtained accommodation entries. A few parties also said that they paid money on the directions of senior Congress leaders,” added the officer, who is one of the people cited in the first instance, and who asked not to be named. Accommodation entries are fake transactions used by an entity to bring its undisclosed income into its books.
ED has also found in its probe that the rent earned from AJL’s properties “was utilized to develop commercial spaces, particularly in Mumbai” , according to another of the persons cited above, a second ED officer.
The agency has also revealed that AJL earned a revenue of ₹29.45 crore from advertisements published in its newspapers during the period 2017-18 to 2020-21. “Of this, ₹15.86 crore was claimed to be received from various Congress affiliated bodies and rest of the amount i.e. ₹13.59 crore was received from other entities. The persons or entities whose names were mentioned in the ledgers of advertisement were summoned and they stated that they had paid the amount on instructions of Congress leaders and some of them even deposed that the money was paid to seek protection from the Congress leaders in the course of their regular business,” added the second officer, who too asked not to be named.
“Most of the ads given are not commensurate with business purposes of the donors as these are mostly in the form of congratulatory messages or birthday wishes to congress top leaders,” he said.
ED attached properties worth ₹751 crore (immovable assets worth ₹661 crore including National Herald House and shares worth ₹90 crore) in November 2023 so that the “beneficial owners” of AJL’s properties do not enjoy these proceeds of crime or try to alienate these assets, the second ED officer added.
To understand the finances and operations of AJL, ED questioned Congress leaders including Pawan Kumar Bansal and current party president Mallikarjun Kharge . The people cited above said that their statements are part of the charge sheet.
Fear of alienation of AJL assets by beneficial owners:
In its attachment order under PMLA, ED has claimed : “By taking over AJL, YI had taken complete control over the properties of AJL. The accrued benefit to YI includes right to enjoy all the benefits embodied in the commercial assets held by AJL at several prominent locations in the country proportionate to YI’s shareholding in AJL. It is important to note here that most of the business assets owned by AJL were acquired as freehold or on long term lease given by the Central and various state governments at meager sums for the purpose of publication of newspaper or magazines.”
“For example, AJL had acquired the property known as National Herald House at Bahadur Shah Zafar Marg (Delhi) on perpetual lease for a paltry sum of Rs. 4.89 lakh from the Central government while Bandra (E) Mumbai property was given to AJL for Rs. 1.39 crore. However huge rent to the tune of ₹142 crore has been earned by AJL from these properties since taking control over AJL by YI in Financial Year 2010-11,” the order added.
The agency , on April 11, gave notice to take possession of these properties and asked a tenant at the Mumbai property to transfer the rent to it.
The federal agency earlier, in its November 2023 order, listed reasons why it feared that the assets could be alienated.
“It is observed that more than 99% of shares of AJL rest with the common officer bearers of AJL, YI and AICC (All India Congress Committee). In this scenario, YI may either transfer the shareholding of AJL to third parties or pledge the shares of AJL to any other person or entity,” the order said.
The agency even found a few instances of properties being transferred or mortgaged or third-party rights created – in Bhopal and Panchkula.
The Congress has said the charges are politically motivated.