NEW DELHI: The Rouse Avenue court on Wednesday began hearing the Enforcement Directorate’s (ED) prosecution complaint against Congress leaders Sonia Gandhi, Rahul Gandhi, and others in the National Herald money laundering case.
The matter is linked to alleged financial irregularities in the transfer of a Rs 90.25 crore loan from the Indian National Congress (INC) to Associated Journals Ltd (AJL), the publisher of the National Herald, and its subsequent assignment to Young Indian for a mere Rs 50 lakh.
‘Congress party donors were cheated’
During the hearing on Wednesday, the ED alleged that the transaction was a criminal conspiracy aimed at misappropriating assets worth over Rs 2,000 crore.
In the opening submissions, additional solicitor general (ASG) SV Raju argued that the offence of money laundering was clearly made out in the case.
“There was a proceeds of crime,” he submitted, asserting that criminal activity continued for the purpose of generating such proceeds, thereby constituting the offence under the Prevention of Money Laundering Act (PMLA), reported news agency ANI.
The court, presided by special judge Vishal Gogne, asked pointed queries to the ED during the hearing. It sought clarity on the ownership of AJL’s assets, specifically whether the company’s shareholders could be considered its owners.
Are assets owned by company or shareholders? Who owns the property as of today? the court asked ED’s special counsel, Zoheb Hossain.
In simple words, if the property of A is usurped by B, does it become proceeds of crime when it was clean in the hands of A, the court asked.
“Are wrongful acts ascribed to individuals but not parties (Congress)? Or is the party a victim?” the judge asked. In response, Hosain said, “The donors of the party are victims”.
Hossain further said that donations and membership fees were collected from the public for party purposes, but were instead diverted as a loan to a company engaged in commercial activities.
He argued this as part of the predicate offence, stressing that “the donors of the Congress party were cheated.”
‘Young Indian company a sham’
Reading from ED’s complaint, ASG Raju highlighted that Young Indian was formed as a sham entity, “a cloak to convert public money to personal use”, and used as a special purpose vehicle to gain control over assets of AJL worth Rs 2,000 crore.
Raju alleged that the accused acted in “consortium with each other to achieve the said nefarious purpose”.
The court was also informed that the alleged proceeds of crime included rental income worth Rs 142 crore received by the accused.
“Proceeds of crime not only include those properties obtained from the scheduled offence, but also any other criminal activity related to the proceeds of crime,” Hossain submitted.
‘Accused enjoyed proceeds of crime’
Submitting that the alleged offence in the complaint is money laundering, ASG Raju argued that he will show that the offence of money laundering is made out.
During the hearing, Raju also confirmed that the complaint was filed under Sections 44 and 45 of the PMLA, involving seven accused individuals, including ex-Congress chief Sonia Gandhi, her son Rahul Gandhi, Gandhi family loyalist Sam Pitroda, and two firms.
When the judge asked whether Pitroda was represented in court, ASG responded that if not, proceedings would continue without him.
Raju said that there is a proceed of crime. Money laundering is a continuing activity. He said that if an offence is committed of generating proceeds of crime and involves a continuing activity, it is money laundering.He said that the attachment of properties took place in November 2023. Till then, the accused were enjoying the proceeds of crime.
Matter listed for day-to-day hearing
The special judge listed the matter for day-to-day hearings on the point of cognisance of the ED’s prosecution complaint from July 2 to July 8. The scheduling followed requests from the defence counsel, including senior advocate Abhishek Manu Singhvi, who sought a July hearing, citing voluminous documents running over 5,000 pages.
“This is an MP/MLA court, and matters are to be heard on a weekly basis,” the judge said, noting that the court would first complete the ED’s arguments, followed by submissions from the defence.
Hossain further submitted that Gandhis, Sonia and Rahul, held 76 per cent of Young Indian’s shares, and by paying just Rs 50 lakh, the entity acquired control over Rs 90.25 crore, thus demonstrating the alleged offence of cheating.
