Congress gave Sonia and Rahul free takeover financing

http://www.firstpost.com/india/congress-gave-sonia-and-rahul-free-takeover-financing-514438.html

by  Nov 5, 2012

Subramanian Swamy, Janata Party president, set the cat among the pigeons when he alleged on 1 November thatSonia Gandhi and Rahul managed to secure access to Rs 1,600 crore of property by getting the Congress party to give Associated Journals Ltd (AJL), publisher of defunct newspapers National Herald and Qaumi Awaaz, a Rs 90 crore, interest-free loan.

After threatening legal action—which has been missing so far from Rahul Gandhi’s end—the Congress party sheepishly admitted on Friday that, yes, it had indeed given a loan of around Rs 90 crore to Associated Journals as part of its “political activities”. This statement was crucial since political parties are not supposed to use their tax-free funds for non-political or commercial activities. (Read the full Congress statement by Janardhan Dwivedi here)

Rahul Gandhi (L) and Sonia Gandhi. PTI

But does this end the controversy? Not quite, as today’s Business Standardshows.

In fact, new questions emerge once one understands how the loan was structured. The loan went to Associated Journals, which then got taken over by Young Indian, a non-profit, Section 25 company owned bySonia Gandhi and Rahul, for Rs 50 lakh. In the process, the loan given to Associated Journals became a loan to Young Indian, and the latter got full control over Associated Journals and all its assets.

Put another way, the interest-free loan given by the Congress was like takeover-funding for Sonia and Rahul’s acquisition of Associated Journals through a non-profit vehicle.

The questions that emerge are these.

Why did the Congress choose to let its party president and her son take over Associated Journals through their private non-profit when it could have done so directly? If the Congress is “emotionally” attached to the newspapers that Nehru started during the freedom struggle, why give it over to its current president and her son?

Why is Congress not clarifying whether this loan is ever to be recovered or never? Since Sonia and Rahul, through their non-profit company Young Indian now own Associated Journals, the loan has to be recovered from them, if at all. Sonia and Rahul own 3,800 shares—1,900 each—out of the issued capital of 5,000 shares.

Motilal Vora, Congress Treasurer, and Oscar Fernandes, party General Secretary, own 600 shares each of the remaining capital of Young Indian. Why should Congress party office-bearers own what should be a party asset created through a loan given by the party? The impropriety—to the extent it was one—of Sonia and Rahul applies equally to Vora and Fernandes, unless there is some other explanation we haven’t heard of as yet.

Why did Rahul Gandhi tell Pioneer in October that he had no intention of restarting theNational Herald, when his own party now says it wants to revive the paper? In reply to aquestion from the Pioneer, Rahul Gandhi’s office replied: “The company has no intention of starting any newspaper.” Janardhan Dwivedi’s Friday note, on the other hand, said: “The Indian National Congress has done its duty in supporting the Associated Journals to help initiate a process to bring the newspaper back to health in compliance with the laws of the land.”

Why is Young Indian, which now effectively owns Associated Journals, not able to say what the real value of the assets acquired in the process is? The answer really lies here: if Associated Journals owns assets that are greater than Rs 90 crore, then the Congress essentially gifted Sonia and Rahul free ownership of assets in excess of Rs 90 crore – even if it is held in a non-profit company.

If, as Swamy alleges, the assets are valued at Rs 1,600 crore, then the nature of the impropriety is extraordinary. Nobody, even a non-profit, can acquire property worth several hundred crores with Rs 90 crore loans from a political party without explaining the reason for the same.

Mother and son—and the Congress party—have some explaining to do.

2 thoughts on “Congress gave Sonia and Rahul free takeover financing

  1. Raman

    Till the corrupt Congress controlled by Sonia is thrown out no damage will happen to them as neither EC nor SC will touch them for protecting their own safety.So more such revelations can come but they will only be of academical interest as neither HCs or SC will touch the party or its leaders.So all the Constitutional Authorities or even Constitution simply obey the Congress and what is the use of petitioning to any of them.No use.At the same time if some petition is filed against BJP or other opposition parties they will be glad to take up the matter and deliver adverse verdicts as all the bodies comprise of impotent persons.So no hope of Freedom till Congress is ousted for ever and that can be done only by people of the country and not the picked up judges or EC.That is the situation prevailing in India and we boast that we are a great democracy.Height of stupidity.

    Reply
  2. NationalistAdvocates Satyagrahuttarpradesh

    Extravagance of Public Finance vis-à-vis curbing the power and duties of C&AG.
    The constitution of India provides that the Comptroller and Auditor General of India shall be appointed by the President by warrant under his hand and seal who shall not be removed from Office, except in the like manner and on the like grounds as a Judge of Supreme Court. The term of appointment shall be for a period of 5 years and the condition of service and salary of the Comptroller and Auditor General of India shall be such as may be determined by Parliament by Law and until they are so determined, shall be as specified in the second schedule of the constitution. The Comptroller and Auditor General shall perform such duties and exercise such powers in relation to the accounts of the union and of the states and of any other authority or body as may be prescribed or under any law made by Parliament. The report of the Comptroller and Auditor General relating to the accounts so maintained of the union shall be submitted to the President who shall cause them to be laid before each house of Parliament . The report relating to the accounts of the states shall be submitted to the Governor who shall cause them to be laid before the legislature of the states.
    That the present accounting system applicable to most Ministries and departments in essentially external to Financial management function in that the payment made by the treasuries and accounts are compiled by audit and accounts offices under the control of the Comptroller and Auditor General on the basis of initial and subsidiary accounts received by them from the treasuries. This system worked fairly well when Governmental business was limited. With the increase ion the volume and variety of Governmental business and the continual set-up of developmental outlays, this system has proved inadequate to the administration task.
    The scheme of separation of accounts from audit was to be implemented in selective ministries e.g communication, civil aviation, tourism, industries and civil supplies w.e.f April 1976, where the expansion regarding the expenditures and its audit was felt to be providing certain constraint and thereby resulting into the delay in implementation of the schemes at the relevant time. However by the gradual increase of the power with these ministries, the similar laxity in relation to the procedural safeguard was further provided the other ministries resulting into the defeat of the very purposes for which the office of the Comptroller and Auditor General was given the power through checks and balances. The effect of the aforesaid process has resulted in the departmentalisation of union accounts enacted in 1976 and the transfer of personnel was given effect by the enforcement of the Act no 59 of 1976 from Indian Audit and Accounts departments which was earlier under the control of C.& AG to the newly formed department of Civil Accounts under the Controller General of Accounts under department of Expenditure ministry of Finance. In this manner the office of C& AG which was constituted under the scheme of the constitution of India to provide the restraint to the expenditure disproportionate from its own discretion by the relevant ministries was brought under the ministry of Finance and thereby giving the unbridle powers to the ministers and thereby overthrowing the constitutional mandate securing the safeguard over the whimsical expenditure. According to the legal opinion of the constitutional experts, the diversification of the financial powers to be utilised by the sole discretion of the bureaucrats without taking into consideration the Audit objections, which could have been made under the original constitutional scheme, was directly resulting into the notion of conferring the absolute power to the respective ministry. This was against the democratic, federal and republic set-up of our Constitution. The aforesaid concept of the parliamentarian democracy, providing the fraternity to an individual in preamble of the constitution, was an attack on its basic structure. This has led to an inadequate financial control which would have been benefited to the nation if such power were remained with C&AG in India. That it would be relevant to point out that the office of the Auditor General of India was created under the Government Of India Act 1935 for exercising the control over expenditure incurred by Central And State Governments and for proper accounting thereof in such forms and in such manner as may be prescribed by him and he was also responsible for rendering a complied account of receipt and expenditure to the Centre and State Governments and he was also required to submit report on the result of Audit in his Audit report to the Governor- General and the Governor of the States for laying it before respective legislatures . That after coming over the constitution of India the Auditor General was designated as Comptroller Audit General of India under chapter V of the constitution.

    Reply

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