Alleging that the Congress has confessed to its 'loan crime', Janata Party president Suramanian Swamy today filed a plea before the Election Commission of India seeking derecognition of the Congress party. In a letter to the Election Commission, Mr Swamy said that the Congress has "prima facie" committed an offence under electoral law as well as Income Tax law for which it is necessary to hold hearings and decide on derecognising the party.
"The written admission by senior Congress leader and spokesperson Janardhan Dwivedi in his press release dated November 2 admitted that Congress has loaned (a sum of more than Rs 90 crores) to a company incorporated under Section 3 of Companies Act, 1956 by name Associated Journals Pvt Ltd. This loan is in violation of the Guidelines and Rules that has to be mandatorily followed by political parties for registration as well as recognition. Section 29A to C of RPA and Section 13A of IT Act do not make any provision for any political party to extend loans to companies with or without interest," the letter said.
Today, Congress general secretary Janardan Dwivedi said reviving National Herald, founded by Jawaharlal Nehru, was an emotional issue for it and no commercial profit accrued to the party from the loan. (Read: Reviving Nehru's newspaper an emotional issue, says Congress
Under attack from the BJP after allegations made by Mr Swamy against Sonia Gandhi and her son Rahul, the Congress had yesterday admitted to at least one of the accusations. In a statement released late Friday evening, the party that it had indeed made "interest-free loans from which no commercial profit has accrued to the Indian National Congress". The statement said, "The Indian National Congress has done its duty... to help initiate a process to bring the newspaper back to health in compliance with the law of the land. (Read: Full statement)
Mr Swamy had alleged that the Gandhis floated a private company Young Indians to "illicitly" acquire a public limited company Associated Journal, which published National Herald, for Rs. 50 lakhs. The company they acquired, he says, has property worth Rs 1600 crore in Delhi. Mr Swamy also alleged that the Congress gave an unsecured loan of Rs. 90 crore to Associated Journals. (Read)
Mr Gandhi has threatened him with legal action. "Our attention has been drawn to your purported press conference of the afternoon of November 1. The allegations made by you are utterly false, entirely baseless and defamatory," Rahul Gandhi's office said in a letter to Mr Swamy.
Mr Swamy yesterday scoffed at Mr Gandhi's threat of legal action. "My advice to Rahul Gandhi is to grow up and go to the court," he said, also denying that he had been sent any letter. (Read)
The BJP has asked the Congress to answer Mr Swamy's allegations. If it was true, BJP leader Arun Jaitley said, that the Congress had paid Rs 90 crores to Associated Journals, then it violated tax and electoral laws. "A political party is not allowed to give loans to anyone," the BJP leader said, adding that such a transfer could land the Congress into much trouble. A political party, he said, could only use funds it collected for political purposes and not for commercial uses.
Sam Pitroda, technocrat and adviser to Prime Minister Manmohan Singh, who is on the managing committee of Young Indians, has also threatened legal action against Mr Swamy. "There are lots of legal options against this motivated and irresponsible content. To be frank and fair, I am surprised that these things are going on in India today. I don't know how else to respond. I would rather spend time and energy worrying about development." (Read)
The Congress' Manish Tewari, who has just taken over as Information and Broadcasting Minister accused the Opposition of indulging in "scoot-and-shoot" in what he called a season for allegations. The charges made by Mr Swamy, he said, were "totally baseless. The BJP cannot question us on corruption. They should look at themselves first."
Mr Swamy's Janata Party belongs to the NDA, the coalition of Opposition parties led by the BJP. He has said that the Gandhis together own 76 per cent of Young Indians, a company which was incorporated in November, 2010. He has alleged that it went on to acquire the Associated Journals, which was founded by Jawaharlal Nehru and others in 1938 to publish newspapers that would offer Indians an option to British publications. The National Herald was published first in 1938; it closed down in 2008. (Read: Swamy's charges)
Mr Swamy has alleged that the Young Indians wrote off the 90-crore loan from the Congress for Rs.50 lakhs, and by a board resolution, the Associated Journals was sold by transferring its shares to Young Indians. Through this, Mr Swamy said, a public firm morphed into a private company.
Apart from Sonia Gandhi and Rahul Gandhi, who hold 38 per cent each in the company, the Young Indians board includes veteran Congress leader Motilal Vora, former minister Oscar Fernandes, Sam Pitroda and Suman Dubey.
Mr Swamy has alleged that the Young Indians' shareholders meeting "was held in Sonia Gandhi's Government allotted 10, Janpath. This is violation of the law since the 10, Janpath, New Delhi Government accommodation cannot be used for commercial purposes and business." The Janata Party chief has sought an inquiry by the CBI and the Corporate Affairs Ministry.