The Adjudicating Authority under the Prevention of Money Laundering Act (PMLA) upheld the freezing order on assets worth Rs 751.9 crore belonging to Associated Journals Limited (AJL) and Young Indian Private Limited (YI) on Wednesday, marking a significant development in the protracted National Herald case.
This opens the door for properties connected to the National Herald newspaper to be seized by the Enforcement Directorate (ED). According to the ED, YI and AJL were intendedly involved in a complex financial transaction that produced “proceeds of crime” totaling Rs 751.9 crore. ED also claimed that The Delhi office of the National Herald and other properties were purchased with these funds.
AJL company publishes the National Herald, a historic Indian newspaper founded by Jawaharlal Nehru. The Indian National Congress (INC) owns the bulk of the shares in AJL through the YI firm. AJL was facing a debt of Rs 90 crore owed to Congress. After YI was established, it provided a loan of Rs 56 crore to AJL to repay the debt. However, according to the ED, this loan effectively represented YI purchasing AJL’s assets at a reduced cost and this deal produced “proceeds of crime” totaling Rs 751.9 crore, which were subsequently used to buy properties.
The INC strongly denies any wrongdoing. They claim that YI simply gave AJL a loan to assist it to pay its debts and that the transaction was an entirely lawful business arrangement. The INC claims that AJL’s assets are legally theirs and that the ED is misinterpreting the deal. The BJP government is accused by the INC of abusing the ED to target its political rivals and claimed it is a “witch hunt” meant to destabilize the opposition. The BJP responds that the ED is looking into a matter of possible financial irregularities and is operating independently. The INC suffers a blow as a result of the PMLA Authority’s decision to maintain the asset freeze. However, the INC is expected to challenge this order in court.
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