BJP leader Subramanian Swamy has written two letters to Prime Minister Narendra Modi accusing the Enforcement Directorate for not taking action in the National Herald case.
In a letter dated August 11, a copy of which is with TNM, Swamy alleges that the present director "seems to have no interest in pursuing any matter connected with the Congress Party, perhaps, due to the fact that he is a close relative of Digvijay Singh, who is General Secretary of the Congress party."
Swamy goes on to say that he had given the ED director "a detailed report of money-laundering carried out by Sonia Gandhi, Rahul Gandhi and four others in the acquisition of National Herald's publishing company" while alleging that an "invisible hand" is stopping the ED from launching an investigation.
In another letter to Modi dated August 12, he details out the case and adds that the ED refused to register a case under the Prevention of Money Laundering Act against the mother and son duo.
What the National Herald controversy is all about
The case is about two companies, the Congress party and real estate.
Associated Journals Pvt. Ltd (AJPL) set up by Jawaharlal Nehru in 1937 was the company that published the now defunct National Herald, Navjivan and Quami Awaz newspapers and the International Weekly magazine.
Young Indian - A private formed in the year 2002 to create a platform for Young Indians. Congress President Sonia Gandhi, Vice-President Rahul Gandhi, Congress leaders Motilal Vohra and Oscar Fernandes are directors in this company.
Sonia Gandhi, and Rahul Gandhi together hold a 76% stake in Young Indian. The rest is held by Congress politicians Moti Lal Vora and Oscar Fernandes (12% each).
Congress party's loan to AJPL
In 2008, a fledgling National Herald was closed down. Subramanian Swamy alleges that in 2011 the Congress Party extended a loan of 90 crores to the Associated Journals Pvt Ltd.
This loan was apparently given to write off accumulated debts of Associated Journal Pvt Ltd and thereby restart the National Herald which was closed in 2008.
When questioned about this in the past, the Congress party has said that extending the loan was part of its political dharma and for propagation of its ideology. The loan was paid off from Rs 2008 crores donation which the party received between 2004-05 and 2010-11.
With the help of the loan, APJL's debts were written off.
Young Indian and AJPL
In the meantime, Young Indian proposed to take over the debt of over 90 crore in lieu of 99.1% shares being transferred to them. Thereby Sonia Gandhi and Rahul Gandhi became owners of the AJPL.
The Mint in an article in November 2102 says, "On 21 December 2010, less than a month after its incorporation, AJPL's board approved the assignment of Rs.90.21 crore in accumulated loans taken from the All India Congress Committee (AICC), to Young Indian. This debt was then retired for a consideration of Rs.50 lakh, which Young Indian paid to AICC. On AJPL's books it was converted into equity."
The real estate that APJL owned
At the heart of the controversy is the Herald House building that AJPL owned, which now effectively belongs to the Young Indian now.
Subramanian Swamy's contention is that the AJPL - Young Indian deal was a sham, intended to grab the Herald house- a property worth 1,600 crores he says. In addition, National Herald has huge properties across the country like New Delhi, Mumbai, Lucknow, Allahabad, Bhopal, Indore, Panchukula.
Swamy approached the court accusing Sonia Gandhi and Rahul Gandhi of grabbing assets of a public limited company by floating a private company and using Congress party's funds. As per Income Tax Act, political parties are debarred from funding business operations.
"Therefore, I urge you to immediately direct the appointment of an able honest and educated high official to be appointed as Director of the ED or permit from within the ranks of ED itself, someone deserving and who meets the tests of minimum educational requirements in law for the job," Swamy concludes in his second letter.