Category Archives: Corruption Galore in India

How Robert Vadra made a killing in the Rajasthan sun

http://www.firstpost.com/business/how-robert-vadra-made-a-killing-in-the-rajasthan-sun-634110.html

You could call him India’s canniest real estate investor. Or you could suggest that he was helped by those who knew he was the son-in-law of India’s most powerful politician. But whichever way to you want to see Robert Vadra, there is little doubt that he made, and is still making, his biggest killing in the deserts of Rajasthan, a state run by a Congress government under Ashok Gehlot.

Parts of this story have already been told in the media, including Firstpost. What we now bring you is the real scale of Vadra’s land holdings, and the humongous profit potential embedded in owning over 10,000 acres of land acquired for a song from unwary farmers. While his mother-in-law is trying to ensure that farmers get more than market prices, Vadra’s caper is about skimming the cream himself with inside knowledge.

Sixty percent of the state (208,110 sq km) is low-cost desert land. It is dead land with no water or habitation in sight. The cost is often as low as Rs 20,000 an acre at some places. You can’t make a killing unless you know someone would want to buy land at significantly a higher price than this.

In this desert state, Vadra picked up piece by piece of wasteland that was strategically located near power sub-stations in Bikaner and elsewhere. And from the few examples at hand, he is raking it in. A plot of 30 hectares costing Rs 4.45 lakh bought two years ago now fetches nearly Rs 2 crore!

No applause please: Vadra has proven to be an astute investor in realty. PTI

No applause please: Vadra has proven to be an astute investor in realty. PTI

Not only that, but in some places he is practically a monopoly seller of the land. In Kolayat, for example, Vadra calls the shots. His companies own nearly 90 percent of the wasteland there.

Through his agents and companies, he directly bought hundreds of acres of land from small and big farmers in areas with solar power potential. According to sources, Vadra owns over 10,000 acres of land in the state today.

Only the state government – and the central government – knew that land around power sub-stations would be valuable once they announced plans incentivise solar power generation. So, logically, the state should have bought land first.

It did, but it did something peculiar. The Congress government in Rajasthan acquired 50,000 hectares of land for solar plants, but bypassed the wasteland near power sub-stations during the acquisition process. Solar plants situated close to sub-stations are most economical since this means you have to invest less in grid lines to evacuate the power.

Did Gehlot’s government know that Vadra was going to buy, or did Vadra know in advance that the state government was going to announce it solar policy well in advance? Firstpost sent a mail to Vadra to get his version of things, but at the time of writing he had failed to respond.

Vadra started creating a land bank near power sub-stations from June 2009. Barely eight months later, in February 2010, the Central Government announced the Jawaharlal Nehru National Solar Mission (NSM) Policy under which huge subsidies (nearly 40 percent) were offered for setting up grid-tied solar power plants.

Land in Bikaner where a solar plant is to be set up. Raman Kripal/ Firstpost

Land in Bikaner where a solar plant is to be set up. Raman Kripal/ Firstpost

Almost immediately, Vadra’s land located near power sub-stations soared in value. The land bought by the state government had practically no takers because most of it was not close enough for easy grid connections. The government is now mulling developing solar parks on this land by setting up elaborate evacuation systems. It will spend a pretty penny in doing so, while Vadra is sitting on crores of profits – and potential profits.

Not one of the 23 companies which obtained licences to set up grid-connected solar power plants under NSM opted for government land! This, despite the fact that the state government offered to lease out or allot the land at 10 percent of the market rate.

Now, stuck with land that no one wants, Rajasthan Energy Minister Jitender Singh says his government will build huge solar parks on the 50,000 hectares by setting up the necessary infrastructure.

For hundreds of private developers who have registered for solar plants in Rajasthan, land near a power sub-station is the top choice. This means they don’t have to bear the cost of putting up gridlines and related infrastructure to connect to transmission sub-stations. Not only that, by setting up solar projects next to sub-stations, the investor suffers minimum loss in transmission and distribution of power.

The state government’s land policy helped Vadra make crores because its own land policy involves only leasing the land, not selling it.

“This makes things more uncertain for a developer, because the government keeps changing and so does the solar policy,’’ a private developer requesting anonymity said.

For instance, on 24 February 2009, the Rajasthan government had issued a circular making it mandatory for solar power producers to supply a certain amount of free power to the state as they were getting vast amounts of land at throwaway rates. Moreover, the government shut “open” access for solar power plants built on the allotted government land. While private solar power developers who procured land on their own were free to sell power outside the state under the “open” access system, those opting to lease government land would have got stuck in case the state did not buy their power.

This circular did not make sense, and was overturned in the new solar policy of the state government in 2011. Under this policy, a private developer can take government land, but the land acquired by the government is 20-30 km away from the grid sub-stations.

The target in the first phase of NSM is 1,000 MW of grid-connected solar power projects by 2013. Jitender Singh says: “The decks have already been cleared for 820 mw of solar power. And over 800 private solar developers have registered with us.’’

Vadra’s land is thus in huge demand for grid-tied solar projects. He is selling these `agricultural’ plots exclusively for solar plants. Since the state is promoting solar power, the rate for converting agricultural land to industrial use is lower than the normal rate prevailing in the state.

Pratap Raju, Joint Managing Director of PR Fonroche Pvt Ltd, who bought land from Vadra’s company Blue Breeze Trading Pvt Ltd and Sky Light Realty Pvt Ltd, says: “Bikaner did not have quite as high isolation as other parts of Rajasthan. It was still quite good. More importantly, this land we chose was 2 km from the sub-station, which meant evacuation costs would be less. Moreover, the sub-station was a 220 kv and brand new, which meant that we could expect quite high uptime/availability. So juggling these several variables – insolation, distance to sub-station, available capacity at the said sub-station – we found this land to be a top choice for us.’’

PR Fonroche, a French joint venture, is developing two solar projects totalling 20 mw of power at Kolayat, about 15 km away from Bikaner. The company had signed a powerpurchase agreement in 2011 and it bought land in May 2012, just in time to launch the project on the targeted deadline.

The site of an upcoming solar plant in Bikaner. Raman Kripal/ Firstpost

The site of an upcoming solar plant in Bikaner. Raman Kripal/ Firstpost

So what kind of killing did Vadra make? Raju says that the price he paid was perhaps something like five times the price of land just three-four years ago.

“It is important to choose the right land at a good price, rather than lowest price, to make the project viable,’’ Raju told Firstpost.

In fact, Kolayat is attracting several other private developers. Greentech Power Pvt Ltd, Alex Spectrum Radiations (P) Ltd, RH Prasad & Company Pvt Ltd and Hasya Enterprises (P) Ltd.

It is not known if they too bought land from Vadra, but in Kolayat, Vadra’s companies own nearly 90 percent of the wasteland. They may have no choice.

Vadra began his real estate investments in Rajasthan in 2009, when the Central government had not yet announced its new solar policy. There was only a hint of it in Prime MinisterManmohan Singh’s statement (while launching India’s Action Plan on Climate Change on 30 June 2008), that in the new energy strategy, “the sun occupies center-stage, as it should, being literally the original source of all energy.”

“We will pool our scientific, technical and managerial talents, with sufficient financial resources, to develop solar energy as a source of abundant energy to power our economy and to transform the lives of our people. Our success in this endeavour will change the face of India. It would also enable India to help change the destinies of people around the world’’, said the PM.

Well, one person whose financial destiny it changed was his party boss’s son-in-law.

Right from the beginning, it was clear that the Rajasthan government was sure to get the lead role in the new solar energy policy because it had perhaps the best solar radiation in India (6-7 kwh/sq m/day) and a vast pool of wasteland. Jodhpur district alone, a solar potential district, is bigger than Kerala.

To execute the policy, the Congress government in Rajasthan started creating a land bank in districts with solar potential. Surprisingly, land that was close to the grid was ignored during the acquisition.

And this is where Robert Vadra jumped in. In 2009, much before the grid-tied solar power generation policy was announced, he started buying wasteland near the sub-stations. Unsuspecting farmers, who live with the hope that their land, which is barren and of no use, will get acquired one day, suddenly found a messiah in Robert Vadra’s agent Mahesh Nagar, brother of Faridabad-based Congress leader Lalit Nagar.

Just 30 km outside Bikaner is a 220 kv grid sub-station located in Kolayat tehsil on National Highway 15. Between June 2009 and June 2010, 63 land deals were struck in Kolayat. And in all these deals, Mahesh Nagar is at the forefront, as an agent of Robert Vadra’s companies, Blue Breeze, Sky Light, North India IT Parks, Real Earth, etc.

A solar power plant in Bikaner, Rajasthan. The land was acquired from a firm owned by Vadra. Raman Kripal/ Firstpost

A solar power plant in Bikaner, Rajasthan. The land was acquired from a firm owned by Vadra. Raman Kripal/ Firstpost

In some deals, he represented other individuals, including Robert Vadra’s Private Secretary Manoj Arora, and his own brother Lalit Nagar, apart from some unknown companies. But Vadra’s pointperson Mahesh Nagar is the agent in all the deals.

Firstpost sent a detailed questionnaire to Robert Vadra and Manoj Arora, asking them specifically about these individuals and unknown companies. Vadra has not replied yet to our queries.

Over 2,200 hectares of land was bought in Kolayat on a war footing in one year. One hectare is equivalent to 3.95 acres. So nearly 8,800 acres of land, equivalent to one sector of Gurgaon, was sold off in Kolayat. This is the tip of the iceberg, because this information is based on investigations conducted near just one power sub-station only. There are nearly 30 power sub-stations in Rajasthan.

Here’s an indicator of the kind of profits Vadra could have made. A plot of 30 hectares costing Rs 4.45 lakh two years ago now fetches nearly Rs 2 crore!

Vadra’s Sky Light Realty Private Ltd bought this plot in Kolayat on 31 March 2010. Just two years later, on 4 May 2012 (according to a sale deed available with Firstpost), Sky Light sold off 29.36 hectares of land in Kolayat for nearly Rs 2 crore (Rs 1,99,58,121) to French joint Venture Fonroche Saaras Energy Pvt Ltd.

The land was as barren as it was with the farmer. Vadra’s company did not add any value to it. Blue Breeze and Sky Light together sold over 55 hectares of land to Fonroche.

Likewise, Vadra’s Sky Light Realty Pvt Ltd sold 3.25 hectares to one Rishipal, resident of Haryana, for Rs 22 lakh (Rs 7 lakh a hectare) on 11 May 2012. Interestingly, Rishipal sold this land to Fonroche seven days later on 18 May 2012.

BJP MP from Bikaner and former IAS officer Arjun Meghwal wondered why Robert Vadra had to invest in dead land in Bikaner. “One can understand Vadra investing in the Gurgaon realty sector, but why Bikaner of all the places,’’ asked Meghwal.

Well, he has his answer now. Bikaner is fast emerging to as the next solar hub in the country! And Robert Vadra made his hay in the sun.

The last gasp of National Herald

http://indiaright.org/detail.php?id=779

Subramanian Swamy 

To begin with, and briefly: In 2011, Ms. Sonia Gandhi and her son, Mr. Rahul Gandhi, both MPs and hence public servants under the Prevention of Corruption Act, had floated, under Section 25 of the Companies Act, a company called Young Indian Private Ltd.

The Ma-Beta corrupt duo hold 76 per cent of the total equity (38 per cent shares each) in the company, while Congress party treasurer Motilal Vora and Oscar Fernandez held the remaining 24 Congress party Treasurer. If any person or group holds more than 74 per cent of a company’s equity, the company can be virtually administered without caring for other shareholders. Thus, Young Indian is a Gandhi-Maino private enterprise that is directly administered by the duo.

Now, we come to the brazen corrupt plot of the duo to acquire another well-endowed entity in terms of assets. The Associated Journals Private Ltd. (AJPL) is that another company. AJPL—the owner-publisher of National Herald, Navjivan, and Quami Awaz newspapers—was set up by prominent Congress leaders in 1938. Jawaharlal Nehru became president of the company.

Because its object was to publish a newspaper, APJL acquired , at concessional rates, from Central and state governments high-value real estate properties in Delhi, Mumbai, Bhopal, Indore, Haryana, and several places in Uttar Pradesh, and some places like on the prime land in Delhi and Lucknow, built massive offices on public donations for the publication of its newspapers.

But, like all Nehru-Gandhi-Maino proclaimed public “enterprises,” AJPL’s main mission of publishing newspapers soon ended in failure. By the 1970s, all three newspapers were running in terrible losses; they failed to pay employees’ wages. Labor agitation forced the owners to close the operations in a lock-out. The shareholders’ list by then had got depleted by death, alienation, or sale, and thus AJPL came fully into the grip of the Nehru dynasty, with family retainer Motilal Vora as chowkidar-president,

By 2008 or a little earlier, Rahul Gandhi was inducted as a shareholder in AJPL. But he failed to disclose this in his sworn affidavit filed as a candidate for Lok Sabha in 2009.

In his sworn assets statement, he declared as ‘Nil’ his shares in companies, when in fact he at least owned three lakh shares in AJPL, and controlling shares in Back-Ops company that he set up during the NDA regime. The Back-Ops ownership was later handed over to sister Priyanka by a backdated letter in 2009, who then promptly wound up the company in 2011—maintaining the family tradition of failed enterprises. The assets acquired following Back-Ops liquidation went into Priyanka’s folder.

In 2010, “Operation AJPL acquisition” began by Young Indian and executed in four steps:

(i) Step 1: Moribund AJPL obtains an unsecured zero interest loan of Rs 90 plus crore from the All India Congress Committee (AICC) in 2011 with no stated purpose (but now the spin given by Congress spokesman Janardan Dwivedi is that the loan was for the emotional attachment of Congress party for National Herald). Section 13A of the Income Tax Act, read with Section 29 A to C of the Representation of the People Act, prohibits any political party from giving loans to commercial or related enterprises.

Note: Motilal Vora is president of AJPL, which received the loan; he is Treasurer of AICC which gave the loan; and he is also a shareholder and Director in Young Indian, the prospective buyer of AJPL!

(ii) Step 2: Young Indian enters the picture with a proposal made by Young Indian Director Motilal Vora to AJPL president Motilal Vora that he would speak to AICC treasurer Motilal Vora to unburden AJPL of the loans due to AICC by a financial derivative of transfer of liability to Young Indian. Note! It helps that Sonia Gandhi is AICC president and Rahul Gandhi is AICC senior-most general secretary.

(iii) Step 3: AJPL, acting on a mere Board Resolution dated February 20, 2012, and not by a Shareholders Meeting, sells by transfer of shares to Young Indian for a mere Rs 50 lakh.

Who cares that Young Indian is not a media company which cannot buy a media company that has got land allotted by government and obtained bank loans on the condition that it is a media company producing newspapers?

Before buying AJPL, Rahul Gandhi transfers 262,411 of his three lakh shares in AJPL to sister Priyanka. Robert Vadra is left out of the deal, because Aruna Roy will see to it that Kejriwal will cut him down to size, with Ahmed Patel ensuring 24×7 media publicity to scare the wits out of Mr. Vadra.

(v) Step 4: The seven-storey Herald House is now securely with Young Indian. The Ma-beta duo illegally opens Herald House, which is in the prime area of New Delhi, for renting. A Passport Seva Kendra rents a large space of two floors, and Minister of External Affairs S.M. Krishna inaugurates the office. Huge, six months’ rent is collected by Young Indian from multinational companies which are soon to start offices in Herald House. The acquisition process is now complete.

Thus the deal was to grab the Rs 1,600-crore worth Herald House and other properties of National Herald and Quami Awaz in Delhi, and another Rs 3,400 crore in different parts of UP, Maharasthra, and MP for which Young Indian made a commitment to pay a mere Rs 50 lakh to AICC for owning the Rs 90 crore obtained from AICC as an unsecured, zero-interest loan and now written off by the AICC.

Now what illegalities have been committed?

1. The deal is a sham, bogus, and a violation of several laws including Companies, the Income-Tax Act, Indian Penal Code Sections 405-08, 420, 467, and 193, Election Law, and Government Residence Allotment Rules.

2. The un-built on land in Mumbai, Indore, Bhopal, Punchkula, Lucknow etc., etc., has been illegally sold to builders of luxury skyscrapers, malls, and housing for Congress Ministers. This is a violation of the land allotment orders and a criminal breach of trust.

3. Young Indian filed statements with the RoC in March 2012, disclosing that the shareholders meetings were held in Sonia Gandhi’s government-allotted 10, Janpath. This is in violation of the law, since 10, Janpath, New Delhi, is government-provided accommodation which cannot be used for commercial purposes and business.

4. More than 80 per cent of the persons mentioned in the 2011 shareholders’ list filed with the RoC are deceased, such prominent persons such as Jawaharlal Nehru, Indira Gandhi, Sharda Prasad, and GD Birla, as also some defunct Kolkata-based companies. Hence the Board Meeting of AJPL handing over the company to Young Indian is a violation of the Companies Act and is an offence as well as a fraud on the public.

I urge, therefore, an immediate probe by the Serious Fraud Investigation Office and CBI into this dubious, stinking deal between Young India and The Associated Journals, and from the Election Commission for the illegality of the AICC I giving a loan to a private company.

Mr. Rahul Gandhi also committed perjury when he told a lie in his 2009 nomination paper for Lok Sabha that he owned ‘NIL’ shares when he owned in fact over three lakh shares of AJPL in 2009.

The bottom line is that National Herald—for which his great grandfather Nehru pompously said, “I will sell Anand Bhavan but never National Herald” —has been strangulated to death by Rahul Gandhi and his mother. Young Indian objectives do not include bring out a newspaper. Rahul Gandhi himself told the PTI on October 9, 2012, after swallowing AJPL, “We have no intention to start or revive a newspaper.”

The last gasp of National Herald, Navjivan, and Quami Awaz has been heard. For just Rs 50 lakh, Rs 5,000-crore of property has been obtained.

Ironically, Herald House is built on a kabaristan on Bahadur Shah Zafar Marg. The Mama-son duo knows the Biblical saying—from dust to dust!

Posted on : 11-15-2012

Political chicanery – A. Surya Prakash. Sonia Gandhi and Rahul Gandhi of Young Indian as joint grabbers of prime properties

http://bharatkalyan97.blogspot.in/2012/11/political-chicanery-surya-prakash-sonia.html

The properties grabbed are not restricted to Herald House on the Fleet Street of Delhi, but extend to places like Indore, Bhopal and Mumbai.

See Dr. Swamy’s statement calling for FIR on cognizable offences and custodial interrogation of Sonia Gandhi and her son Rahul Gandhi

kalyanaraman

STATEMENT OF Dr.SUBRAMANIAN SWAMY on November 11,2012

I have communicated to the Chief Minister of Madhya Pradesh, Mr. Shivraj Chauhan that, based on the CNN IBN investigation being broadcast, he must set up a SIT inquiry into the real estate fraud in the Associated Journals Pvt Ltd which is a wholly owned company of Young Indian Pvt Ltd, which company in turn is controlled by Ms. Sonia Gandhi and Mr. Rahul Gandhi, both public servants as defined by the Prevention of Corruption Act.

SIT investigation is necessary since the offences committed by the AJPL, the culpability for which devolves now on Young Indian Pvt Ltd and therefore the Gandhi mother-son duo, are fully liable for multiple offences which range from criminal breach of trust under IPC, Prevention of Money Laundering Act, to Companies Act.

For SIT a FIR has to be filed for these cognizable offences, and it will be necessary for Ms. Sonia Gandhi and her son Rahul Gandhi to be subject to custodial interrogation.

Herald land scam: Subramanian Swamy seeks SIT probe
Dailybhaskar.com | Nov 12, 2012, 00:11AM IST

http://youtu.be/tUnRkLPSogU
Published on Nov 10, 2012 by ibnlive
After Delhi, Lucknow and Mumbai, another Herald land row has come to light. This time in Bhopal where a shopping mall was built on the land sold to the newspaper at a concessional rate. The BJP-led state government is now planning to take back the plot. Janata Party leader Subramanian Swamy’s allegation on Congress President Sonia Gandhi and General Secretary Rahul Gandhi over Associated Journals limited that once published the National Herald and Quomi Awaaz newspapers has provided a fresh opportunity to the ruling BJP in Madhya Pradesh to score some political points.

The government is now saying it would soon acquire properties that have been constructed on the land that was allotted to Associated Journals limited in 1981 by the than Congress government led by Arjun Singh. The land allocation, however, has already been cancelled in March this year. The Congress party is washing its hands from the deal saying the land was sold to a former minister once the papers shut down.

New Delhi/Bhopal: Janata Party supremo Subramanian Swamy has attacked the ruling Congress at the Centre by demanding an SIT inquiry into the Herald land scam in Bhopal.

As per reports, the plot of land that was sold at a concessional rate to the newspaper was used to build a shopping mall, Zee News reported.

CNN-IBN stated that the BJP-led government in Madhya Pradesh (MP) is planning to take the plot back.

Swamy had earlier heaped charges of corruption against Congress president Sonia Gandhi and general secretary Rahul Gandhi over Associated Journals that once published National Herald and Qaumi Awaaz newspapers.

In the wake of Swamy’s charges, the MP government too has reportedly been planning to take back the properties built on the land allotted in 1981 to Associated Journals by the then Arjun Singh-led Congress government.

http://daily.bhaskar.com/article/MP-BHO-herald-land-scam-subramanian-swamy-seeks-sit-probe-4036704-NOR.html
——
Now, Herald land row comes to light in Bhopal too POLITICS NEWS, Updated Nov 11, 2012 at 11:04am IST

Bhopal: After Delhi, Lucknow and Mumbai, another Herald land row has come to light. This time in Bhopal where a shopping mall was built on the land sold to the newspaper at a concessional rate. The BJP-led state government is now planning to take back the plot. Janata Party leader Subramanian Swamy’s allegation on Congress President Sonia Gandhi and General Secretary Rahul Gandhi over Associated Journals limited that once published the National Herald and Quomi Awaaz newspapers has provided a fresh opportunity to the ruling BJP in Madhya Pradesh to score some political points.
The government is now saying it would soon acquire properties that have been constructed on the land that was allotted to Associated Journals limited in 1981 by the than Congress government led by Arjun Singh. The land allocation, however, has already been cancelled in March this year. The Congress party is washing its hands from the deal saying the land was sold to a former minister once the papers shut down.

The building in Bhopal’s industrial district built on the 56000 square feet was allotted to Associated Journals limited by the Congress government in 1981. In March 2012, a year after the land lease expired, the Bhopal Development Authority cancelled the land allocation. But the property has continued to stay in the possession of the heirs of former Congress minister Tanvant Singh Keer.

Housing and Environment Minister, Madhya Pradesh, Jayant Malaiya said, “The property could not be sold or rented out. The terms and conditions have been violated. The interests of the state would be protected.”

The opposition Congress party has tried to avoid controversy by stating that the land had already been sold. Congress treasurer Motilal Vohra wrote a letter to the Bhopal Development Authority in November 2011 that says all conditions of the lease deed are being followed.

Spokesman state Congress Manak Aggarwal said, “The land was sold to the than minister Tanvant Singh Keer. Once the paper stopped publishing the than Bureau Chief came with a proposal and the trust decided to sell it off.”

The ruling BJP by expressing its desire to acquire the property constructed on the land allotted to Associated Journals limited is also trying to tame other organisations who are making commercial use of the land allotted for newspapers. The Supreme Court of India has already directed to impose a penalty on such violations but the state government has not moved beyond serving notices.

http://ibnlive.in.com/news/now-herald-land-row-comes-to-light-in-bhopal-too/305036-37-64.html

November 13, 2012 (Page 8)

This heralds a new low in political chicanery

A Surya Prakash

The Congress cannot be allowed to get away by glib talk to justify the brazen diversion of party funds to help the Nehru-Gandhi family acquire a stake in a piece of prime real estate in Delhi

At a time when there has been a phenomenal increase in the funds pouring into the coffers of political parties, the allegations made by Janata Party president Subramanian Swamy regarding the misuse of funds by the Congress’s first family to usurp the Rs 1,600 crore Herald House on Delhi’s ‘Fleet Street’, raises the broader issue of defining permissible parameters for the deployment of party funds.

According to Mr Swamy, a tireless crusader, Congress advanced an interest-free loan of Rs 90 crore to The Associated Journals Ltd that owned the now defunct National Herald. This loan was meant to take over the liabilities of TAJL. Later, another company called Young Indian was launched, in which Ms Sonia Gandhi and Mr Rahul Gandhi together hold 76 per cent of the shares. This company subscribed to a fresh issue of shares of TAJL by paying a meagre Rs 50 lakh, but this was enough to gain control. Through this manoeuvre, the mother-son duo have acquired control of Herald House on Bahadur Shah Zafar Marg, Delhi’s ‘Fleet Street’. The wily manner in which this property has been appropriated would put Punjabi Bagh real estate agents to shame!

These transactions also go to prove that the Nehru-Gandhis have proprietorial control over the Congress. That is why, the party ‘loans’ Rs 90 crore to TAJL and thereafter a company owned largely by 10 Janpath — Young Indian — acquires control of TAJL. All these manoeuvres should come as no surprise to those who have closely followed the methods deployed by the family to gain control of large tracts of real estate all over Lutyens’ Delhi.

But, Mr Swamy’s accusations raise the larger question of where and how political parties should be allowed to spend their money. Can they enter into business activities or enable companies owned by their office-bearers to acquire properties or businesses? These questions merit urgent consideration for the simple reason that, in the last decade there has been a staggering growth in the income of political parties.

Thanks to the sustained efforts of the Association of Democratic Rights, we now have authentic information on the kind of funds available with political parties in the country. The organisation took the RTI route to ferret out information. Following an application by the ADR, the Central Information Commission directed the Income Tax authorities to furnish details of the income tax returns filed by recognised national and State political parties since 2004-05. Thereafter, National Election Watch and the ADR collated and analysed the data and put their findings in the public domain.

The ADR’s analysis showed that the top five political parties with the highest total income over this seven year period are: the Indian National Congress (Rs 2,008 crore), the Bharatiya Janata Party (Rs 994 crore), the BSP (Rs 484 crore), the Communist Party of India-Marxist (Rs 417 crore) and the Samajwadi Party (Rs 279 crore). It found that a major source of income for most political parties was ‘donations and voluntary contributions’.

However, interestingly, donations from named contributors (persons who donate more than Rs 20,000) and whose contributions have to be mandatorily declared “form a very small percentage of total income of political parties”. The analysis of the data for the last two of these seven fiscal years by ADR has showed that BJP’s donations from named donors amount to 22.76 per cent of its total income, whereas it was just 11.89 per cent for the Congress.

The BSP, strangely had not received any donation above Rs 20,000 although its total income for the two years was Rs 172.67 crore. The Nationalist Congress Party, on the other hand, got 4.64 per cent of its income from named donors. There was also much variance in the nature of incomes of the two Communist parties — CPM got just 1.29 per cent, whereas the Communist Party of India showed 57.02 per cent of its income from donations above Rs 20,000.

As per this data, the total income of six national parties over seven financial years since 2004-05 is around Rs 4,000 crore. The Congress had an income of Rs 222 crore in 2004-05, the year the United Progressive Alliance headed by that party, came to power. The party’s income jumped to Rs 467 crore in 2009-10, the year this coalition obtained a fresh mandate. In 2010-11, the income was Rs 307 crore. The Congress’s total income since 2004-05 is Rs 2,008 crore, making it the most affluent political party in the country.

The Congress has not denied Mr Swamy’s accusations. Initially, it thought it could get away by showering insults on him. But this did not work because, on the face of it, the National Herald operation looked like a ploy to usurp a valuable piece of real estate. Wiser counsel prevailed sometime later and the party spokesman claimed that it was “a matter of pride” for the party to have given such a loan to the company that published National Herald. The party also claimed that it was supporting the company “to help initiate a process to bring the newspaper back to health”. But, this claim of the spokesperson flies in the face of the statement from Mr Gandhi’s office that Young Indian, the new company owned by him and his mother, “has no intention of starting a newspaper”.

The party’s explanations will not wash, because at the end of the day, a Rs 1,600 crore asset of a defunct newspaper company has been acquired for a pittance by a company which is almost wholly owned by the Gandhis. These dubious transactions raise a host of questions. Prominent among them are whether a political party can engage in commercial activity or deploy funds to promote the business activities of its office-bearers?

Look beyond the Congress and you will see the magnitude of the problem. What if the other political parties which run like proprietorship companies — the Bahujan Samaj Party and the Samajwadi Party — emulate the Congress? If parties are allowed to indulge in such practices, what will become of our democratic system? Can political parties be entitled to tax exemptions if they go commercial? Will not our political parties begin to double up as some kind of tax-exempt commercial institutions in which illegal funds are parked? Since political parties are entitled to tax exemptions under the Income Tax Act, it is not too much to demand that these funds be used only for political purposes. Who will ensure this?

http://www.dailypioneer.com/columnists/item/52824-this-heralds-a-new-low-in-political-chicanery.html

Support to National Herald Interest Free: Cong

NEW DELHI | NOV 02, 2012

Breaking its silence, the Congress tonight rejected allegations levelled by Janata Party President Subramanian Swamy and maintained that its support to National Herald newspaper was interest free loans yielding no commercial profit to the party.

After the party spokesman and other top leaders during the day refused to go into Swamy’s allegations, the party came out with its position in a late night press release.

Congress General Secretary Janardan Dwivedi said in the release that the Congress has done its duty in supporting The Associated Journals Limited to help initiate a process to bring the newspaper back to health in compliance with the law of the land.

“This support was extended by the Indian National Congress in the form of interest-free loans from which no commercial profit has accrued to INC,” the release said.

Yesterday Swamy addressed a press conference in which he alleged that Congress party gave a loan of Rs 90 crores to Associated Journals that published the now defunct National Herald and Quami Awaz, which was in violation of Income Tax and election laws.

He had also said that a new company Young Indian was floated to take over the functioning of Associated Journals by Sonia and Rahul to grab a prized building in the capital and renting it out in violation of laws.

Dwivedi said the object of Congress is the well-being and advancement of the people of India and the establishment in India, by peaceful and constitutional means of a social state based on Parliamentary democracy in which there is equality of opportunity and of political, economic and social rights and which aims at world peace and fellowship.

“In furtherance of its object and its political activities, it is a matter of pride for the Indian National Congress that it has supported The Associated Journals Limited, publisher of the National Herald and other newspapers, founded by Pandit Jawaharlal Nehru in 1937, which have played a role in our freedom movement.

“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,” Dwivedi said.

1/D-140
NOV 02, 2012
09:47 PM
“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” >>>>

RIGHT – AND THEN “Gifted” it to Madam Sonia Gandhi, her son Rahul Gandhi, the Congress treasurer and a few Sonia hard core loyalists’ “private” company?

BHARAT, DELHI
PERMALINK | LIKE (12) | DISLIKE (0) | REPORT ABUSE
2/D-163
NOV 02, 2012
11:37 PM
“Dwivedi said the object of Congress is the well-being and advancement of the people of India and the establishment in India, by peaceful and constitutional means of a social state based on Parliamentary democracy in which there is equality of opportunity and of political, economic and social rights and which aims at world peace and fellowship.”

Bullshit overload.

NOBODY INPARTICULAR, MUMBAI
PERMALINK | LIKE (12) | DISLIKE (0) | REPORT ABUSE
3/D-42
NOV 03, 2012
07:39 AM
Cant but look at Swamy with sense of Pride,having met him way back in 1977 before the Elections.

He has made Congress suck up ,Be it 2G or now the 90 c loan to Lady and Son.

The man has been unused by India.Even when asked why he hasnt gone after Gadkari he said that Congress has all the Investigation agencies to probe Gadkari why should he do it.

Can he refom the Judicial System in India

WRONGONE, CHENNAI
PERMALINK | LIKE (5) | DISLIKE (0) | REPORT ABUSE
4/D-60
NOV 03, 2012
11:12 AM
There are quite a lot of loose threads in this case due to the loose irresponsible talk of members of bandwagon.You will see that they meticulously avoid mentioning the chronological order of events only to confuse the public.A dubious named not-for-profit company was formed with 76 % shareholding by gandhi family and the balance by motilal vohra , the treasurer of congress party and 90 crore is advanced later to National Herald which has become subsidiary of Young Indian.Certainly it is a conspiracy by the trio to hijack the money of congress party to hijack the property of National Herald.sequentially analysing the events, evidently this 90 crores goes to the enjoyment of Young indian through subsidiary National Herald. No newspaper copy is sold free of cost and hence it has commercial value. The meeting of the company is held in the Official residence of Sonia gandhi reducing to the level of a board room.All these go to prove the veracity of the charges levelled by Swamy but we see fellows like PC Chako, Manish tewari, Dwivedy etc., shout out with dutch courage supporting a failing case. People have become thoughtful, analytical to draw conclusions and the old tactics of these guys to dust the eyes of the aam aadmi in banana republic of india will not work. It will also be necessary to look at whether any fund was diverted out of this 90 crore to the property purchse by Vadragandhiji.It isalso necessry on the part of Outlook India to sequence out the birth of Young Indian, Its MOU and AA in detail, the GM of National Herald to waive off to Young indian with date and the signature of approving signatories, date of issue of the 90 crore cheque and the name of the receiving party, date of its encashment, the date of let out of premises of National Herald to MEA for its pass port office with the monthly rent and service charges and the name of the property owner receiving the rent, items on which money spent out so far for the not-for-profit purposes etc., in order for the readers to know more about the stink this has generated. Will the editor put some investigative journalist on the job? Thanks for the excellent presentations

SHREE, CHENNAI http://news.outlookindia.com/allfeedbacks.aspx?artid=779802&commentid=61356#61356

National Herald affair: It’s fraud all the way

http://newindianexpress.com/opinion/article1332271.ece

By S Gurumurthy

08th November 2012 07:42 AM

The bare facts exposed by Dr Subramanian Swamy on the National Herald affair this month are eloquent, needing very little prose. The fraud is explicit without exposition. Here are the basic facts. Financial crisis forced Associated Journals Limited (AJL), the publishers of National Herald newspaper founded by Pandit Nehru, to close down the paper in 2008. To pay off the employees to help the closure, the Congress Party had given interest-free loan of Rs 90 crore plus to AJL, then. With the newspaper shut, AJL had become a mere real estate company in 2008, with property in Delhi, Lucknow and Mumbai worth over Rs 2,000 crore in its balance sheet. Against this, AJL owed just Rs 90-crore plus to the Congress. It had very little liability, besides. The balance real estate of AJL, left after paying off the dues to Congress, legally and morally belonged to AJL’s thousand plus shareholders. Big and small, they had contributed Rs 89 lakh to AJL’s capital, when the Rupee was hundred times more valuable. If AJL’s real estate had been sold and cash distributed to the shareholders,     Brahm Dev Narain, a teacher holding just 41 equity shares in AJL, would have got some Rs 84,000. Hundreds of others would have got similar sums.

But, by deep design and defying both law and morals, Sonia Gandhi and Rahul Gandhi appropriated — actually misappropriated — control of AJL’s Rs 2,000-cr real estate without paying a dime to AJL’s shareholders. In just three months, between November 2010 and February 2011 and in three moves, control of thousands of crore worth property passed onto the Gandhi family. Here unfolds the sordid story.

As the first step, in November 2010, a trust company named “Young Indian” was mysteriously formed with a capital of just Rs 5 lakh, in which Sonia Gandhi and Rahul Gandhi owned 38 per cent each (total 76 per cent) and two family retainers, Motilal Vora and Oscar Fernandes, owned the balance 24 per cent, making it cent percent Gandhi family outfit. Second, the very next month, December 2010, the Gandhis got the Congress party to assign the Rs 90-cr plus loan given to AJL in 2008 to Young Indian (read themselves) by paying to the party just Rs 50 lakh. The Congress wrote off the balance Rs 89.75 cr as irrecoverable. This creative — actually criminal — accounting substituted Young Indian for the Congress, entitling Young Indian to recover Rs 90-cr plus due from AJL. Finally, in February 2011, AJL converted the Rs 90-cr plus due to Young Indian into equity shares and allotted them. By this step, Young Indian became almost 99 per cent owner of AJL, and as much of the real estate of AJL. When AJL had assets worth Rs 2,000 cr, why should the Congress write off Rs 89.75 cr due from it as bad debt? Would the Congress have done it for any person outside the Gandhi family? And did the Congress Working Committee or AICC know of, or consent to, donate Rs 89.75 cr to the Gandhis through Young Indian? More. In the founding documents of Young Indian the one word that is totally absent is “Congress”! The design is self-evident. The Congress should be out completely and the Gandhi family should exclusively grab control of the AJL’s lands at Delhi, Lucknow and Mumbai worth thousands of crores for pittance. And it did happen.

The rest of Young Indian’s story stinks even more. With the Gandhi family and loyalists holding its entire capital, the directors of Young Indian — besides Sonia and Rahul, are Vora, Oscar, Suman Dubey and Sam Pitroda — are time-tested friends of the family. But, what is the object of Young Indian? Young Indian says its first annual report (April 27, 2012), “is engaged in activities to inculcate in the minds of India’s youth commitment to the ideals of democratic and secular society”.

See what is the first act of this idealist company, after its birth in November 2010, to “inculcate” such ideals in youth. Its annual report shows that the company forthwith started its “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 lakh”, by which it became AJL’s 99 per cent owner. So the first act of Young Indian to promote idealism in Indian youth was to defraud the Congress party of Rs 89.75 crore on the one hand and the shareholders of AJL of thousands of crores of money on the other. See how the plot thickens.

Young Indians’ annual report discloses a further design — to alter the character of AJL itself. It says that AJL is recasting “its activities” to align its objects, Young Indian’s “main objects”. Finally to merge AJL into Young Indian? And “as part of the restructuring exercise of” AJL, says the annual report, the “loan was converted into equity”. A joke indeed! Young Indian speaks as if it is helping to restructure AJL. Young Indian is a pauper. Its director’s report shows that, from its inception in November 2010 to March 2012, its total income was — believe it — just Rs 800! Its total expenditure was Rs 69.79 lakh and its loss, after deducting its income (Rs 800) was Rs 69.78 lakh. Does the AJL, with huge real estate, need an asset-less and income-less pauper Young Indian for its restructure?

See the deepening design. Young Indian’s annual report intentionally conceals the crucial fact that the loan of Rs 90-cr plus owed by AJL to it was originally due to the Congress party — the intention being that Young Indian looted the Congress should be concealed. The report also suppresses the fact that AJL with asset base of a couple of thousands of crores had become (almost) its wholly-owned subsidiary. It says, in fine print, that shareholders — who? Sonia, Rahul, Vora, Oscar, Dubey and Pitroda! — will get information regarding the subsidiary on request.

This is a fraud on company law, which mandates that the details of the subsidiary be available to the public. More. Young Indian also totally suppresses its 99 per cent holding in the 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 `50 lakh for 99 per cent of shares of the AJL worth thousands of crores is shown not as an asset, but as expenditure! Why? Obvious.

To keep the investment out of the balance sheet of Young Indian! The annual report blatantly lies that since the net worth of AJL is negative, its investment in 99 per cent capital of AJL is written off as expenditure.

The balance sheet of AJL as on March 31, 2011, shows a positive net worth Rs 8 crore; of which Young Indian’s 99 per cent share is Rs 7.92 cr. So the negative net worth story is a fabrication. The real net worth of Young Indian is, of course, over Rs 2,000 cr.

And the final lie. After Dr Swamy’s expose, the Congress, with tears in its eyes, told the nation on November 3, 2012, that revival of National Herald, a symbol of Gandhi-Nehru ideals, was an “emotional issue” for the party, as if it has paid Rs 90 cr plus now for Herald’s revival. It had paid the amount in 2008 to help close, not revive, the Herald. Just three weeks before the Congress shed tears to revive National Herald, on October 11, 2012, ‘The Pioneer’ newspaper reported that Rahul Gandhi was emphatic that Young Indian had no intention of relaunching any newspaper. 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”. Any more evidence needed to prove that the sobbing story of Herald’s revival is fake? A post facto lie?

So. The Gandhi family usurping the AJL’s Rs 2,000 cr real estate, with the funds of the Congress and through Young Indian, is fraud all the way. On the Congress. On the shareholders of AJL. And on the National Herald.

Pandit Nehru said: “I will not let the National Herald close down even if I have to sell (my own house) Anand Bhawan”. And now? The Gandhis have buried the National Herald and looted its real estate.

S. Gurumurthy is a well-known commentator on political and economic issues.

E-mail: comment@gurumurthy.net