Criminal breach of trust complaint against Sonia Gandhi & 6 others, at Patiala Court
Subramanian Swamy filed complaint against Sonia Gandhi, Rahul Gandhi, Motilal Vora, Suman Dubey,Oscar Fernadez, Sam Pitroda and their private company Young Indian for criminal breach of trust and defrauding the assets of National Herald newspaper worth more than Rs.2000cr at Patiala Court on February 14, 2013…arguments will start…
attached is the petition
BEFORE THE LEARNED CHIEF JUDICIAL MAGISTRATE
Patiala House Courts, New Delhi
CASE NO. OF 2013
Dr Subramanian Swamy Complainant
Sonia Gandhi @ Edvige Albina Antonia Maino Accused
S No Document Pages
1. Petition of Criminal Complaint along with the Affidavit of the Complainant 1-20
2. Annexure C-1 being Certificate of Incorporation dated 20.11.1937 of Associated Journals Limited 21-26
3. Annexure C-2 being List of Shareholders of Associated Journals Ltd. as on 13.9.2011 27-57
4. Annexure C-3being Letter No. DCITR-IV 04-09 dated 28.12.2004 of Deputy Commissioner of Income Tax, passing on Information re AICC and Associated Journals Ltd., to Deputy Commissioner of Income Tax, Circle 31(3), New Delhi. 58-59
5. Annexure C-4, being an itemisation of real estate belonging to Associated Journals Ltd. 60
6. Annexure C-5 being chart showing the interconnection between the Accused, the Young Indian, the AICC and AJL. 61
7. Annexure C-6 being Extract of Resolution dated 26.2.2011 of Associated Journals Ltd. 62-63
8. Annexure C-7 being notice of AGM to be held on 15.5.2012, of Young Indian. 64-68
9. Annexure C-8 being Form 32 dated 16.7.2010 of Associated Journals Ltd. 69-72
10. Annexure C-9 being Form 32 dated 6.2.2011 of Associated Journals Ltd. 73-76
11. Annexure C-10 Colly being:
1. Certificate of Incorporation dated 23.11.2010 of Young Indian;
2. Resolution dated 13.12.2010 of Young Indian. 77-78
12. Annexure C-11 being Form 20B of Young Indian re AGM etc. for financial year ending 31.3.2012. 79-85
13. Annexure C-12 being Schedule 7 of Young Indian dated 20.4.2012, for the period ended 31.3.2012. 86-89
14. Annexure C-13being Letter dated 4.2.2011 of Mr. Vishwa Bandhu Gupta, resigning from Directorship of Associated Journal Ltd. 90
15. Annexure C-14, being Press Release dated 2.11.2012 of Congress Party. 91
16. Annexure C-15 Colly being:
1. Email dated 9.10.2012, from Office of Mr. Rahul Gandhi, M.P., to The Pioneer.
2. Pioneer news item dated 11.10.2012 92-93
BEFORE THE LEARNED CHIEF JUDICIAL MAGISTRATE
Patiala House Courts, New Delhi
CASE NO. OF 2013
Dr Subramanian Swamy
A-77, Nizamuddin East,
New Delhi 110013 Complainant
1. Sonia Gandhi @ Edvige Albina Antonia Maino
President, All India Congress Committee,
New Delhi 110011
2. Rahul Gandhi
Vice President, All India Congress Committee,
12 Tughlak Lane,
New Delhi 110011
3. Motilal Vora.
Treasurer, All India Congress Committee,
33, Lodi Estate,
New Delhi 110003
4. Oscar Fernandes
General Secretary, All India Congress Committee,
8, Pandit Pant Marg,
New Delhi 110001
5. Suman Dubey
125, Panchsheel Park,
New Delhi 110017
6. Sam Pitroda @ Satyanarayan Gangaram Pitroda
301, Trinity Lane,
Oak Brook, Illinois 60523 USA
Room No.125, Planning Commission,
New Delhi 110001
7. Young Indian
5A, Herald House,
Bahadur Shah Zafar Marg,
New Delhi 110002
All Accused Persons
A Petition of Complaint constituting offences under Sections 403, 406 and 420r/w Section 120B of the Indian Penal Code and other relevant provisions of the Indian Penal Code
This Complaint against the above named accused is most respectfully is as herein below:
1. The Complainant is the President of the Janata Party, the political party founded by Shri Jayaprakash Narayan. The Complainant is a nationally and internationally well recognised activist as one who has been fighting against corruption in high places. He has been elected five times to Parliament and been Union Cabinet Minister for Commerce, and of Law & Justice; and he also held Cabinet rank position as Chairman of the Commission on Labour Standard and International Trade. He was awarded the Ph.D. in Economics by the world famous Harvard University USA, and has been teaching at the rank of full Professor at the Indian Institute of Technology, Delhi, as well as on the Faculty of the Harvard University for nearly 50 years.
2. The Complainant heads the Action Committee Against Corruption in India [ACACI], which focuses on specific action against macro level corrupt acts especially in the criminal misconduct of high level public officials. It consists of eminent and scholarly citizens who have a record of life long fight against corruption. The website of the ACACIhttp://www.acaci.in/ gives all details about the aims of ACACI and the persons, who are its constituents.
3. Even before formation of the ACACI, the Complainant has been fighting corruption at high places and was involved in exposing corruption in 2G Spectrum and Aircel-Maxis cases at all levels, in the public domain as well as in the courts.
4. The subject matter of this Complaint are various offences including fraud, cheating, misappropriation, and criminal breach of trust by the accused persons, committed against the All India Congress Committee [hereafter Congress Party], and The Associated Journals Ltd [hereafter AJL] who are the publishers of National Herald newspaper, which newspaper was founded under the Chairmanship of Jawaharlal Nehru [Annexure C- 1] to support the fight for freedom, with the motto “Freedom is in peril. Defend it with all your might”.
5. The cheating, fraud, breach of trust and the dishonest misappropriation of funds of the Congress party which were collected from the public at large and for which, since 1977 the party was extended tax exemption under Section 13A of the Income Tax Act, was used by the Accused to criminally misappropriate the assets of the shareholders of the AJL for commercial use, albeit under the cloak of Section 25 of the Companies Act, 1956.
6. This extraordinary fraud, dishonesty, cheating misappropriation and breach of trust was made possible because of crony control over the Congress party and AJL by the Accused persons, particularly A1 to A3, with reckless disregard of conflict of interest and breach of trust.
7. Briefly, in eight swift steps this extraordinary crime was executed:
Step 1: The AJL was formally closed and printing of National Herald, Navjivan and Qaumi Awaz was terminated and thus ceased in 2008, saddled with a huge unpaid debt of Rs 90 crores approximately.
Step 2: On November 23, 2010, Young Indian Private Limited Company (hereinafter referred to as YI) (A7) was incorporated with just Rs. 5 lakhs as paid up capital u/s 25 of the Companies Act, in which Ms. Sonia Gandhi (A1) and her son Mr. Rahul Gandhi (A2) owned 38% each of the shares issued, that is 76 % together.
Step 3: In December 2010, the Board of Directors of YI formally passed a resolution to “own” the outstanding debt of the AJL, and admittedly obtained an unsecured zero interest loan from the Congress Party for an equivalent amount to liquidate the said debt. The Congress Party President is also Ms. Sonia Gandhi (A1), the then General Secretary was Mr. Rahul Gandhi (A2), now Vice President, the party Treasurer is Motilal Vora (A3), who besides being share holder/director of YI (A7), was then also CMD of the AJL.
Step 4: The AJL thereafter held a meeting of its Board, and after coming to the bogus conclusion that it could not from its assets discharge the debt, resolved without reference to and approval of the shareholders, that in lieu of the YI (A7) owning of its debt, and for a further consideration of Rs. 50 lakhs from YI, the entire share equity be transferred to YI. Thus AJL became a wholly owned company of YI.
Step 5: A1 as President of the Congress Party, along with other party office bearers A2, A3, A4, and who together owned 100% of the equity of the YI, wrote off the loan obtained from the party as irrecoverable.
Step 6: Thus, by a mere payment of Rs. 50 lakhs by YI, the company acquired the complete ownership of AJL From the Balance Sheet it can be seen that contrary to the claim of the AJL Board, the AJL had real estate assets of at least Rs. 2000 crores, including a multi-story building in prime area of New Delhi on Bahadur Shah Zafar Marg. AJL has real estate in Lucknow, Bhopal, Indore, Mumbai, Panchkula, Patna and other yet identified places. A conservative estimate of real estate worth is placed at Rs 5000 crores, all provided originally by various central and state governments after 1947 for facilitating newspaper printing, and publishing.
Step 7: Having taken possession of this vast real estate the YI private limited company declared that according to its objectives submitted for obtaining registration under section 25 of the Companies Act, 1956 it will not engage in publishing a newspaper including the National Herald.
Step 8: National Herald House on prime property in New Delhi is opened for commercial renting. According to estimates, YI already receives at least Rs. 60 lakhs per month as rent on space made available. The fraud, cheating, misappropriation and criminal breach of trust was thus completed.
8. The details of the fraud, cheating, misappropriation and criminal breach of trust are set out herein below in the following paragraphs.
9. The AJL had closed down the National Herald newspaper in 2008, because of a financial crisis. AJL also published certain Urdu dailies, which also were closed down in that year. The National Herald was not owned by the Nehru family or any particular set of shareholders. It was of the general public, particularly those who were part of the freedom movement and later part of the Congress party, which had contributed most of the share capital of the AJL, evident from Annexure C-2, the list of shareholders of AJL as on 13.9.2011. At that time, around 99 per cent of shares of AJL were appropriated by Young Indian [A7 herein] by fraud and criminal breach of trust, and by making dishonest use of the misappropriated funds of the Congress party as explained later in this Complaint.
10. In late 1987 and later at different points of time, the National Herald was kept suspended and finally it was closed down in 2008.At that time, since the closure entailed the legal obligation to pay off the employees’ terminal compensation, the Congress Party had given an interest-free loan of more than Rs 90 crores to AJL. Even when, after Independence, it was functional, it was always financed and illegally by the Congress party, not by the family members of Jawaharlal Nehru. In 2004, certain Income Tax officers had brought this to the notice of their superiors, who under political pressure failed to take action [see Annexure C-3].
11. This is a crucial fact in the context of the offences alleged by this Complainant. That it was the Congress Party which was funding the paper, is an admission of fact, judging from the editorial written by the editor of National Herald on 1.4.2008 when the paper appeared last. The media reported that in its last editorial, the Editor of the National Herald wrote: “Herald hopes for a better tomorrow”, stated, “With its glorious tradition, will National Herald be made to remain only a part of history, or, will it continue to function to herald change and progress in time with the positive basic values for which India has always stood?” National Herald’s then editor-in-chief T V Venkitachalam was keen that the newspaper does not become part of history as happened with Mahatma Gandhi’s Harijan (which closed down during Gandhi’s lifetime). He further wrote: “The paper is part of Nehru’s legacy and has continued to uphold the traditions of secularism and non-alignment and I hope the Congress party will not allow it to close down finally.” [http://www.sify.com/news/national-herald-shuts-down-after-70-years-news-national-jegnDCjhdff.html].
12. With the newspaper shut down , in 2008, AJL became a mere real estate company , with properties in Delhi (where it has an extremely valuable plot of land at 5A, Bahadur Shah Zafar Marg on which stands Herald House) Lucknow, Bhopal, Indore and Mumbai and other as yet undiscovered places. Appended hereto as Annexure C-4 is an itemisation, albeit a rough one, setting out what is known about these properties, all in prime locations and all allotted at concessional rates, to AJL by various Governments. It is estimated that this real estate is presently certainly worth more than Rs 2000 crores in its balance sheet. Informal estimates put this value at Rs 5000 crores. Against this, AJL owed an amount of just over Rs 90 crores to the Congress party for zero interest unsecured loans. Besides this, it had very little other liability. The balance of real estate of AJL left over even after paying off the Rs. 90 crore plus loan due to the Congress party, actually legally and morally belonged to AJL’s thousand plus shareholders. Big and small shareholders of AJL had contributed approximately Rs 89 lacs to AJL’s capital at different times when the Rupee was valued at more than hundred times its present value. If AJL’s shares or real estate had been sold by bid and auction and the proceeds distributed to them, hundreds of shareholders would have received back sums equivalent to several thousand times the amount invested by them originally because of the huge appreciation in the value of the real estate owned by AJL; and the Congress party would have got back the loan with interest from 2008.
13. The core of the instant Complaint is as follows: the Accused have conspired to commit the offences of dishonestly misappropriating, cheating, and criminal breach of trust by the following acts and modus operandi, namely:
i. On November 23, 2010, Sonia Gandhi [A1] and Rahul Gandhi [A2] came together with other accused for a criminal conspiracy and thus formed a company named Young Indian [A7] under Sec 25 of the Companies Act. A1 and A2 control 76 per cent of the total shares of Young Indian; and together with A3 and A4, who are their loyalists; they own 100 percent of the shares [see the appended chart which is Annexure C- 5].
ii. The very next month, December 2010, the Accused A1 and A2 with other Accused, conspired and got assigned to themselves the debt of Rs 90.25 crores owed to the Congress Party since 2008 by AJL (whose funds are entrusted to, and also controlled by, A1 to A3 as President, Vice President, and Treasurer / office bearers of the Congress party) for a paltry consideration of Rs 50 lakhs by fraudulently misrepresenting that AJL had no net-worth and is unable to re- pay that debt to the Congress party, when in fact AJL has huge real estate worth thousands of crores and relatively very little liabilities.
iii. By this step, by paying just Rs 50 lakhs, A7 (the surrogate of A1 and A2), obtained the right to recover Rs 90.25 crores from AJL. Thus, A1 to A4 dishonestly cheated, misappropriated and committed criminal breach of trust on the Congress party to the extent of Rs 89.75 crores [equal to Rs 90.25 crores minus Rs. 50 lakhs];
iv. Finally, on 26.2.2011, A3 (who was director in AJL since 2002 and who by 2006 had become Chairman of AJL and who by 2010 had become Chairman and Managing Director of AJL) and A5 (made a director of AJL on 21.12.2010) and A6 (made director of AJL on 17.6.2010) passed resolutions to convert the loan of Rs 90.25 crores (that had been assigned to Young Indian [A7]) into almost all its equity shares, thereby vesting in Young Indian (A7) control and indirect ownership of around 99 percent of real estate worth thousands of crores of rupees. Appended hereto as Annexure C-6 are the Minutes of the aforesaid meeting of AJL.
Thereby the Accused committed criminal breach of trust on the Congress and/or the shareholders of AJL; and properties of the shareholders of AJL and/or the rights (which ought to have accrued to the Congress party by the conversion of the loan of Rs. 90.25 crores into equity) was dishonestly misappropriated by the Accused; and the Shareholders of AJL and/or the Congress Party were cheated.
v. Thus, it appears to be a case of double cheating, double criminal misappropriation and double criminal breach of trust – once by getting the loan of Rs 90.25 crores due to the Congress from AJL assigned for Rs 50 lacs in favour of A7 controlled by A1 and A2 with the participation of A3 and A4 by misrepresenting that AJL’s net-worth is negative when its book value as well as the real net-worth were hugely positive; and once more by converting the loan costing Rs 50 lakhs only in the hands of A7 into equity shares of the face value of Rs 90.25 crores and with real values running into thousands of crores of rupees.
vi. The First Accused [Sonia Gandhi] has been the President of the Congress Party since 1997 and presently is its President and in that capacity she is, in law and in fact, entrusted with the properties and funds of the organisation which she had the duty to safeguard and protect. She is the longest serving President of the Congress Party having been elected as such in 1997. The First Accused is regarded as the most powerful leader of the Congress party since Independence. The bio-data of the First Accused is in the All India Congress Committee website URL:http://www.aicc.org.in/new/aicc-president-bio.php. The Congress Party constitution provides in Art XIX (i) as follows:
“The Working Committee shall constitute a Trust for holding immoveable properties belonging to the All India Congress Committee. The Board of Trustees of the said trust shall be appointed by the Working Committee and shall comprise of not less than five nor more than nine Trustees including the Chairman and the other ex-officio Trustees. The President of the Congress shall be Chairman (ex-officio) of the Trust and the Treasurer of the AICC and the General Secretary Incharge of Administration of AICC shall be ex-officio members of the Board. The term of the members of the Board of Trustees other than the Chairman and the two other ex-officio Trustees shall be three years. The properties shall be held in the name of the said Trust and if that be not possible in a certain case/cases, then in such manner as directed by the Working Committee.”
The Congress Constitution is clear that the President of the Congress Party is the ex-officio trustee of the immovable property of the party. Again under Art XIX (i) of the Constitution “The President shall appoint a Treasurer….from amongst the members of the Working Committee.”
It is evident from the Constitution [Art XIX (i)] that the President and the Treasurer of the Congress Party are entrusted with the immovable properties of the party. The Constitution of the Congress Party provides that “Indulging in fraudulent action relating to Congress funds” and “embezzlement of Congress funds” are [Art 4(c) of the Constitution] a breach of discipline, obviously because it is also breach of trust.
The First Accused is the leading conspirator to commit the fraud, cheating, dishonest misappropriation and criminal breach of trust against the Congress party of which A1 is the President and against AJL and its shareholders and she is a main beneficiary of the fraud, cheating, dishonest misappropriation, and criminal breach of trust. A1 facilitated the assignment of the loan due from AJL to the Congress Party in favour of Young Indian (over which A1 and A2 exercised 76 per cent control) and of which the meetings are invariably held at 10 Janpath, New Delhi 110001, the official residence of A1. Appended hereto as Annexure C-7 are certain minutes of the meetings dated 15.5.2012 of Young Indian, which make this good.
vii. The Second Accused is the Vice President of the Congress party and the son of the First Accused. He was General Secretary of Congress party for the past six years and elevated as Vice President in January 2013. Irrespective of the Constitutional provisions of the Congress Party, the First and the Second Accused factually control the entire Congress party and its decision making. The family of the First and the Second Accused persons constitute the most powerful extra-constitutional power centre of the Congress party. The views and words of the First and the Second Accused persons finally bind the Party.
The Second Accused is also a leading conspirator and beneficiary (being the son of A1 and designated as her sole political legatee) to commit fraud, cheating, dishonest misappropriation and criminal breach of trust against the Congress party (of which A2 is presently sole Vice President) and against AJL and its shareholders; and he is also another main beneficiary of the fraud, cheating, dishonest misappropriation, and criminal breach of trust. In fact, from 2008 onwards, A2 held ,on behalf of certain of his family trusts, 3 lakh shares of AJL.(In 2011, of these 3 lakh shares, A2 transferred 2.4 lakh shares in AJL within the family, to his sister Priyanka Vadra). Also A2 facilitated the assignment of the loan due from AJL to the Congress Party in favour of Young Indian over which A1 and A2 exercised 76 per cent control.
viii. The Third Accused was given charge in 1998, of the finances of the Congress party; and since 2000, he has been formally designated as the Treasurer of the Congress party; and presently he continues to be the Treasurer of the Congress Party. Article XX of the Congress Constitution provides under the title “Treasurer” that “The treasurer shall be incharge of the funds of the Congress and shall keep proper accounts of all investments, income and expenditure.” According to the Constitution of the Congress party, the Treasurer is the appointee of the President of the Congress Party and it is not an elected post. The Third Accused is also the director and Chairman and Managing Director of the board of directors of AJL and he was controlling the affairs of AJL as a fiduciary of the shareholders and of the company.
The Third Accused is again a critical conspirator to commit the fraud, cheating, dishonest misappropriation and criminal breach of trust against the Congress party of which A3 is the Treasurer and against AJL and its shareholders; and he is also a beneficiary of the fraud, cheating, dishonest misappropriation, and criminal breach of trust. A3 facilitated the assignment of the loan due from AJL to the Congress Party in favour of Young Indian over which A1 and A2 exercised 76 per cent control and in which A3 was holding a 12 per cent interest.
ix. The Fourth Accused has for decades, been a close and loyal associate of the family of the First and Second Accused. He is a longstanding office-bearer of the Congress Party and presently he is its General Secretary. The Fourth Accused was made a director of AJL on 17.6.2010 which appears to be the beginning of the fraud perpetrated as explained herein. Appended hereto as Annexure C-8, is evidence of his induction in AJL.
The Fourth Accused is again an important and integral conspirator to commit the fraud, cheating, dishonest misappropriation and criminal breach of trust against the Congress party (of which A4 is a General Secretary) and against AJL and its shareholders and as pointed out hereinabove, he is also a beneficiary of the fraud, cheating, dishonest misappropriation, and criminal breach of trust. A4 facilitated the assignment of the loan due from AJL to the Congress Party in favour of Young Indian over which A1 and A2 exercised 76 per cent control and in which A4 was holding 12 per cent interest.
x. The Fifth Accused has, for several decades, been a close and loyal associate of the family of the First and Second Accused persons. The Fifth Accused was one of the promoters of Young Indian [A7] which was the instrument through which the fraud and criminal breach of trust was executed by the Accused persons. In furtherance of the conspiracy, the Fifth Accused was made director of AJL on 21.11.2010 (see Annexure C-9) which appears to be the preparatory step, after getting the AJL loan due to the Congress assigned to Young Indian [A7] to the conversion of the loan into equity in favour of Young Indian. On the same day A1 became director of Young Indian [A7], i.e., 21.12.2010, A5 (who held 550 shares in A7) transferred his holdings to A1; but he continues to be a Director and authorised signatory of AJL.(see Annexure C-9). In fact, at the inception of Young Indian, the registered address of A7 was at the residence of A5, and the first meeting of its Managing Committee was held at his residence; and he was also the authorised signatory of Young Indian (See Annexure C-10 Colly).
xi. The Sixth Accused has been the close friend and loyalist of the family of the First and the Second Accused persons since at least 1984 when he became the Technology Adviser to the then Prime Minister, the husband of the First Accused. The Sixth Accused is one of the promoters of Young Indian which was the instrument through which the fraud, misappropriation, cheating and criminal breach of trust was executed and as such the sixth accused is an important conspirator in the crime. The Sixth Accused, likewise, was made director of AJL on 21.12.2010, which, as pointed out earlier, appears to be the preparatory step, after getting the AJL loan due to the Congress assigned to Young Indian [A7] to the conversion of the loan into equity in favour of Young Indian. On the same day A1 became director of Young Indian [A7], i.e. 21.12.2010, A6, who held 550 shares in A7 transferred his holdings to A4; but he continues to be a director of Young Indian (A7), and also of AJL.
14. The Seventh Accused is the Young Indian company, incorporated under Section 25 of the Companies Act in which the Accused persons 1 to 4 hold the total capital, and A1 and A2 hold 76 per cent, and in which A6 is a Director, and A5 is both a Director, and the authorised signatory.
It is relevant to note the dates of appointment to the Board of Young Indian, of its six founding Directors, all Accused herein (see Annexure C-11):
22.11.2010: A-5 and A-6;
22.1.2011:A-1, A-3, and A-4.
(The first financial year after incorporation of A7 covered the period from 23.11.2010 up to 31.3.2012 (See Annexure C-12)).
15. Sometime in the second/third quarter of the year 2010, the Accused persons ( who are fiduciaries entrusted with the funds and properties of the Congress party and AJL, which was funded on a regular basis by the Congress party and is therefore the property of the Congress party in substance) entered into a criminal conspiracy, with dishonest and fraudulent intention, to cheat the Congress party and misappropriate and embezzle its funds entrusted to the care of the First, Second, Third and Fourth Accused and conspired with the other accused namely Fifth, Sixth and Seventh Accused and used the funds of the Congress Party illegally to subscribe for and take over 99 per cent control of the shareholding of AJL through a company which A1 to A4 controlled 100 percent and thus cheat and embezzle the funds and the properties belonging to over a thousand shareholders of AJL who had invested into it and/or the Congress party which had lent Rs 90.25 crore to it, the ultimate object of the conspiracy being to misappropriate the assets of the Congress and AJL impressed with the character of trust and convert those assets to their own control and use. As pointed out earlier, Annexure C-5 is a chart showing the interconnection between the Accused, the Young Indian, the Congress party (AICC) and AJL.
16. But, by deep criminal design and defying law and indeed the Constitution of the Congress party, the Accused Persons misappropriated control of AJL’s at least Rs.2000 crores worth of real estate without paying a paisa to AJL’s shareholders and to the Congress [which had funded the subsistence of AJL from time to time and also lent Rs 90.25 crores to enable closure of the publication of National Herald (so as to make it debt free and transform it into a high value real estate company)].
17. In just three months, between November 2010 and February 2011 and in the below mentioned (see Para 22 herein below) four moves, control of thousands of crore worth properties, belonging to the shareholders of AJL and/or the Congress Party ,passed to the control of A1 to A4 particularly to the family of A1 and A2.
18. The criminal conspiracy dishonestly and fraudulently to double-cheat and misappropriate by which Congress Party on the one hand and the shareholders of AJL on the other and the assets of the Congress party as well the properties of AJL were criminally misappropriated unfolds thus:
i. As the First step, preparations for forming a company under Section 25 of the Companies Act, with a view to criminally misappropriate the funds and properties of the Congress party and AJL as explained in detail hereinafter began on 17.6.2010, at which time, A4 was made director of AJL.
ii. As the Second step, on 23 November 2010, the charitable trust company under Section 25 of the Companies Act named “Young Indian” [Accused 7] was formed with capital of just Rs 5 lakhs, in which, finally, Sonia Gandhi [A1] and Rahul Gandhi [A2] acquired and owned 38 percent each [total 76 percent between the two of them] and two close associates of A1 and A2, Motilal Vora, Treasurer of the Congress Party [A3] and Oscar Fernandez, General Secretary of the Congress Party [A4] owned the balance 24 percent, making it cent percent owned and controlled by A1 to A4. The intention is self-evident that 76 percent of the voting rights in the company which virtually means the full ownership of a corporate under the law should vest between A1 and A2.
iii. The Third step, the very next month, December 2010, A1 and A2 got the Congress party to assign the Rs 90 crores plus loan given to AJL in 2008 to Young Indian [A 7] by paying to the Party a paltry sum of Rs 50 lakhs by dishonestly misrepresenting to the Congress Party that the amount of Rs 90 crores was irrecoverable and therefore had to be written off. The Congress wrote off the balance Rs 89.75 crores as irrecoverable. This creative and criminal accounting which enabled cheating and misappropriation of the funds of the Congress Party by the accused persons particularly A1 and A2, substituted Young Indian for the Congress, entitling Young Indian [A7] to recover Rs 90 crores plus due from AJL. And simultaneously, A5 and A6 were made directors of AJL to enable the criminal conspiracy to be executed.
iv. As the Fourth and final step, in February 2011, AJL converted the Rs 90 crore plus due to Young Indian [A7] into equity shares and allotted them. By this step, Young Indian [A7] which was 100 percent controlled by A1 to A4 became almost 99 percent owner of AJL, and as much of the real estate of AJL. The very fact that when AJL had assets worth at least Rs.2000 crores, the Congress party was forced by the Accused persons A1 to A4 to write off Rs 89.75crores due from it as bad debt (when in fact, it is a good and recoverable debt considering the extent of properties of AJL), makes explicit the dishonest and fraudulent intention of the Accused persons.
19. The very fact that but for the accused persons (who are in absolute control of the Congress party) the Congress Party would not have written off Rs 89.75 crores in favour of Young Indian (which is also controlled by them), shows that the Accused persons have dishonestly and fraudulently misused their fiduciary position to cheat and defraud the Congress Party. It does not appear that the Congress Working Committee or AICC know of, or consented to, waive the debt of Rs 89.75 crore to in favour of the President [A1] and the General Secretary [A2] through the section 25 company Young Indian [A7]. The criminal intent to cheat and dishonestly misappropriate the Congress Party funds is self -evident from the fact in the founding documents of Young Indian the one word that is totally absent is “Congress”. (See Annexure C-12) The criminal design is explicit.
20. The intention of the Accused was that name of the Congress, (whose funds misappropriated by Young Indian [A7] was used to fraudulently misappropriate the properties and funds of AJL), should be kept out completely so that there is no trace of the fraud left (and no proceeds from selling/utilising/renting etc. should pass on to the Congress party) and that the Accused 1 to 4 and particularly A1 and A2 should , for a pittance, exclusively grab control of AJL’s lands at Delhi, Lucknow, Bhopal, Indore and Mumbai worth thousands of crores .
Significantly Vishwa Bandhu Gupta who was director in AJL since 19.6.2000 suddenly resigned or was made to resign on 4.2.2011 (see Annexure C-13) before the final act of AJL to convert the 90.25 crore loan originally due to the Congress party and misappropriated by A7 as explained in detail into equity shares by which 99 control of AJL passed into the hands of A1 to A4.
21. The structure of the Young Indian [A7] and the way it is owned and controlled, show how the cheating of the Congress party and AJL and the criminal misappropriation of the property and funds of both was carried out and completed. With A1 and A2 and their loyalists A3 and A4 holding its entire capital, the directors of Young Indian [A7] are, besides the shareholders A1 to A4 (who hold the entire capital of A7), time-tested friends of the family of A1 and A2,( namely A5 and A6). According to the first Annual report of Young Indian [A7] dated [27th April 2012], it “is engaged in activities to inculcate in the mind of India’s youth commitment to the ideals of democratic and secular society”.
22. The first act of A7, after its birth in November 2010, to “inculcate” such ideals in youth, was to forthwith start “operations in December 2010” and as its first act in pursuance of “its objects”, it acquired the “loan owed” by AJL “for a consideration of Rs 50 lakhs”, by which it became APL’s 99 percent owner. So the first act of Young Indian [A7] to promote idealism in Indian youth was to cheat, defraud and misappropriate the property of the Congress party to the extent of Rs 89.75 crores on the one hand and the shareholders of AJL of couple of thousands crore on the other.
23. The Annual Report of Young Indian [A7] discloses and admits the further design to complete the irreversible merger of the misappropriated funds and properties of the Congress Party and AJL into itself, namely, by altering the character of AJL itself. The Annual Report of A7 says that AJL is recasting “its activities” to align AJL’s objects to Young India’s “main objects”, which indicates the final intention to merge AJL into Young India. The Annual Report of A7 further says that “as part of the restructuring exercise of” AJL, the “loan was converted into equity”. It shows a blatant design to suppress facts. Annual Report of Young India [A7], which is a pauper, speaks as if it is helping to restructure AJL. The director’s report of A7 (see Annexure C-12) shows that, from its inception in November 2010 to March 2012, its total income was just Rs 800! Its total expenditure was Rs 69.79 lakhs and its loss, after deducting its income [Rs 800] was Rs 69.78 lakhs. The Report of Young India [A7] nowhere mentions that AJL has huge real estate, because if it were mentioned the question would arise as to why with huge real estate, AJL would need an asset-less and income-less pauper Young India [A7] for its restructure.
24. The deepening design and criminal intent are also self-evident from the fact that Annual Report of Young Indian [A7] intentionally conceals the crucial fact that the loan of more than Rs 90 crores, owed by AJL to it was originally due to the Congress party – the intention being that that Young Indian looted the Congress should be concealed. The report also suppresses the fact that AJL with asset base of at least Rs 2000 crores had become its wholly owned subsidiary. Section 212 of the Companies Act 1956 requires that the Directors’ Report of the holding company should give details of the subsidiary company. This information is to be given for The Report also says, in fine print, that shareholders will get information regarding the subsidiary on request and the shareholders are A1 [Sonia Gandhi] A2 [Rahul Gandhi] A3 [Motilal Vora] A4 [Oscar Fernnandez] A5 [Suman Dubey] and A6 [Sam Pitroda]. This is a fraud on law, which, under section 212 of the Companies Act 1956, requires that the details of the subsidiary be attached to the balance sheet of the holding company.
25. With a view to conceal the fraud from coming to public notice or otherwise get found out, Young Indian [A7] has totally suppressed its 99 percent holding in AJL saying that the shareholding “is treated as application on the object of the company” and so “the same has not been reflected as an investment in shares”. This deceptive accounting jargon means that the payment of Rs 50 lacs for 99 percent of shares of AJL worth thousands of crores is shown, not as an asset, but as expenditure. It is obvious that the design was to keep the 99 percent shareholding in AJL held by Young Indian [A7] out of the balance sheet of Young Indian [A7], so that the very fact that almost the entire paid up capital of AJL is owned by Young Indian [Accused 7] is kept totally suppressed. The annual report of Young Indian also fabricates a blatant false story that, since the net worth of AJL is negative, its investment in 99 percent capital of AJL is written off as expenditure. The truth is that the balance sheet of AJL as on 31.3.2011 shows a positive net worth Rs 8 crore; of which Young Indian’s 99 percent share is Rs 7.92 cr. So the negative net worth story is a fabrication. The real net worth of Young Indian assets net of liability is of course over Rs 2000 crores.
26. The Complainant had brought out the fraud through a press conference addressed by him on November 1, 2012 at Delhi. The Complainant had mentioned in the press release how the A1 and A2 had misappropriated the funds of the Congress Party and through the misappropriated funds of the congress party how they misappropriated the properties of AJL and besides the complainant had also pointed out that two floors of the Herald House in New Delhi which is one of the prime properties owned by AJL had been let out to Pass Port Seva Kendra of the Central Government of which A1 heads the National Advisory Council. The complainant has since come to know that the rent paid for the two floors by Pass Port Seva Kendra is Rs 60 lacs per month. The Complainant had also pointed out that the meetings of Young Indian [A7] were held at No. 10, Janpath, which is the official residence of A1.
27. In the context of the allegation by the Complainant, after the exposure of the fraudulent dealing by A1 to A4, the spokesperson Congress Party told the nation on November 2, 2012 (see Annexure C-14) that the Congress Party had lent Rs 90 crores to National Herald [AJL] and that revival of National Herald, a symbol of Gandhi-Nehru ideals, was an “emotional issue” for the party. This gave the impression that the Congress has paid more than Rs 90 crore now for Herald revival. But the Party had actually paid the amount in 2008 to help close, not revive, the Herald. Even as the Congress party spokesperson asserted on November 3, 2012 that the Congress party had paid the money to revive National Herald and that reviving National Herald was an emotional issue for the party, just three weeks earlier, on October 11, 2012, the media reported that Rahul Gandhi was emphatic that Young Indian had no intention of re-launching any newspaper (see Annexure C-15-Colly) The media reported that Rahul Gandhi was speaking for Young Indian [A7]. The media reported that by an email to The Pioneer, Rahul Gandhi’s office said “Young Indian is a not-for-profit company and does not have commercial operations……The company has no intention of starting any newspaper”. It is self-evident that the entire story of revival of National Herald is sham and a post facto lie after the exposure of the fraud by the complainant.
28. The family of A1 and A2 usurping through the instrumentality of Young Indian [A7] the AJL’s real estate of several thousand crores, with the embezzled loan funds of the Congress ,constitutes various offences including fraud, misfeasance, breach of trust and cheating on the Congress Party and AJL and its shareholders of AJL. It is ironical that while Pandit Nehru said “I will not let the National Herald close down even if I have to sell [my own house] Anand Bhawan”, the third and fourth generation members of the late leader’s family Gandhis have closed down the National Herald and misappropriated its properties by employing the embezzled funds of the Congress party.
29. The Accused herein are therefore guilty of conspiring together to commit dishonest misappropriation of property, criminal breach of trust and cheating.
30. The Accused have conspired together to commit dishonest misappropriation of the debt due from AJL to the Congress party by false representing that the AJL was unable to pay the debt and having the debt of Rs 90 crores assigned for a paltry consideration of Rs 50 lacs to A7, controlled by A1 to A4 and using that debt to acquire 99 percent of the shares of AJL which has property worth thousands of crores of rupees.
31. The Accused have conspired together to commit criminal breach of trust of the properties of the Congress party and AJL, which belongs to its shareholders and to the Congress party which had been funding its survival and had funded its closure, and converted the properties of the Congress party and of AJL to their own exclusive control. In doing so they have rendered themselves liable to be punished for various offences including Section 406 of IPC read with Section 120(B) of the IPC.
32. The Accused have also dishonestly induced the Congress party to assign to them its valuable right to recover Rs 90 crores from AJL for a paltry sum of Rs 50 lacs by fraudulently representing to the Congress party that AJL was unable to pay that debt when in fact they knew that AJL’s assets were worth thousands of crores and that AJL would be able to pay off the debt. The Accused have therefore committed substantive offences u/s 420 of IPC.
33. It is appropriate that your honour would be graciously pleased to take cognisance of the aforesaid offences and to issue process to set the criminal procedure into motion to prosecute the Accused under various sections of the IPC including Sections 403, 406, and 420 r/w Section 120B of the Indian Penal Code and directing them to stand trial of this case and pass such other orders including issue search warrants as you honour may deem fit to meet the ends of justice.
34. And for this act of kindness, the Complainant, as in duty bound, shall forever pray.
Date February 14, 2013
Place : New Delhi COMPLAINANT
I, Subramanian Swamy, resident of A 77, Nizamuddin East, New Delhi 110013, aged about 73 years, do hereby solemnly affirm and state as under:
1. THAT I am Complainant in the above matter and fully acquainted with the facts of the instant case and fully competent to swear thereto.
2. THAT the facts stated in this Complaint are true to my personal knowledge.
3. THAT the legal submissions stated in this Complaint are believed by me to be true.
4. THAT Para 33 is a prayer.
Verified at Delhi on this day of January 2013 that the facts stated in stated in this Complaint hereinabove are true to my personal knowledge, no part of this affidavit is false and nothing material is concealed therefrom.
ITEMISATION OF THE REAL ESTATE BELONGING TO ASSOCIATED JOURNALS LTD.
THE DETAILS OF A FEW PROPERTIES ARE GIVEN BELOW WHICH ARE AMONG OTHER PROPERTIES:
1. Delhi: Herald House, Bahadur Shah Zafar Marg, Delhi-110002.
This is a seven storey building on around 50 cents of land, with about 1,00,000 square feet of office space.
2. Mumbai: At Bandra East, near Bandra Station.
This is a building on a 3,400 square yard plot.
3. Lucknow: A two acre plot on which stand two buildings, Nehru Bhawan and Nehru Manzil.
4. Indore: A 22,000 square foot property, with buildings.
5. Bhopal: A 50,000 square foot plot with building.