Following extensive hearings under the Prevention of Money Laundering Act (PMLA), a pivotal court decision favors the Enforcement Directorate (ED) in a high-profile money laundering case involving Associated Journals Limited (AJL) and Young India (YI). The Authority has upheld the provisional attachment order of properties worth ₹751.9 crore.
Previously, the ED had questioned Congress leaders Rahul Gandhi and Sonia Gandhi in relation to these assets, wherein both hold a significant 76% stake in Young India.
ED Temporarily Attaches ₹751 Crore Worth of Properties
Last year, the ED initiated proceedings under the PMLA 2002, issuing an interim order to attach properties valued at ₹751.9 crore. An investigation revealed serious irregularities in the financial dealings of AJL and YI.
Insights from the Investigation:
AJL owns immovable assets worth ₹661.69 crore across cities such as Delhi, Mumbai, and Lucknow, purportedly acquired through criminal proceeds. Young India was found to have criminal income amounting to ₹90.21 crore in equity shares from AJL.
Court Ratifies Allegations
An investigation spurred by a private complaint filed on June 26, 2014, led to court-initiated ED investigation. The court found the allegations to be valid, including criminal breach of trust, fraud, misappropriation of property, and conspiracy. Seven individuals, including Young India, were prima facie deemed guilty.
The probe further revealed a calculated conspiracy by the accused to acquire AJL’s valuable assets through the shell company Young India, initially established for newspaper publication purposes. AJL had been allocated land for newspaper publishing at concessional rates and ceased its publishing activities in 2008, redirecting the assets’ use for commercial enterprises.
How the Money Was Manipulated
The All India Congress Committee (AICC) reportedly had an outstanding loan of ₹90. 21 crore on AJL. AICC classified the loan as irrecoverable, and despite the lack of adequate funds, transferred it to the newly formed company Young India for a nominal amount of ₹50 lakhs.
Subsequently, Young India demanded either repayment of the loan or issuance of equity shares in AJL. An extraordinary general meeting of AJL decided to increase its share capital and issued new shares worth ₹90.21 crore to Young India. As a result, the shareholding of over 1000 shareholders was diluted to a mere 1%, effectively making AJL a subsidiary of Young India and handing over control of its assets to Young India. The ED concluded that these steps not only defrauded the shareholders of AJL but also the donors of the Congress Party.
