Senior advocate Abhishek Manu Singhvi, representing Congress leader Sonia Gandhi, has characterized the Enforcement Directorate's (ED) case against her in the National Herald matter as "truly a strange" one, arguing that it is unprecedented and lacks the fundamental elements typically associated with money laundering.
Singhvi made these arguments in a Delhi court, during his rebuttal to Additional Solicitor General S.V. Raju, who concluded his arguments on the cognizance of the chargesheet filed by the ED. The ED has accused Sonia Gandhi, Rahul Gandhi, and several others, including late Congress leaders Motilal Vora and Oscar Fernandes, of conspiracy and money laundering in connection with the alleged fraudulent takeover of assets worth over ₹2,000 crore belonging to the Associated Journals Limited (AJL), which published the National Herald newspaper. The agency claims that the Gandhis, holding a majority stake (76%) in Young Indian, a not-for-profit company, illicitly acquired AJL's assets in exchange for a ₹90 crore loan.
Singhvi, however, contended that the entire exercise was undertaken to make AJL debt-free. He argued that companies routinely employ various instruments to relieve themselves of debt, and assigning the debt to another entity is a legitimate practice. He highlighted that Young Indian is a not-for-profit organization, meaning it cannot distribute dividends, perks, salaries, or bonuses.
Singhvi questioned the ED's motives and the timing of their investigation, pointing out that the agency remained inactive for several years and only initiated the probe based on a private complaint with apparent political motivations. He argued that having the National Herald under the control of individuals associated with the Congress party is essential, stating that placing it in the hands of an unrelated body would be akin to "having Hamlet without the Prince of Denmark".
The core of Singhvi's argument rests on the claim that the ED's case is a "money laundering case, without any property, without use or projection of property". He emphasized that no assets were transferred from Associated Journals Ltd to Young Indian Pvt Ltd, further questioning the basis of the ED's charges. He also challenged the court's jurisdiction to try the case.
The ED's chargesheet against the Gandhis and others invokes Sections 3 and 4 of the Prevention of Money Laundering Act (PMLA), which deal with money laundering and its punishment. The chargesheet also names Suman Dubey, Sam Pitroda, Sunil Bhandari, Young Indian, and Dotex Merchandise Private Limited.
The ED alleges that the Gandhis are the "beneficial owners" of Young Indian and that they gained complete control of AJL's assets, worth ₹2,000 crore, for a mere ₹50 lakh. The agency claims to have identified proceeds of crime amounting to ₹988 crore in the case. The ED also argues that fabricated rent receipts and fraudulent payments were used to siphon off funds.
The court has raised questions regarding the ED's actions, particularly in light of the common practice of companies, including Public Sector Undertakings (PSUs) and banks, writing off loans. The court questioned why the Congress party and the All India Congress Committee (AICC) were not named as accused if they were involved in the decision-making process.
The National Herald case continues to be a subject of intense legal and political debate. Sonia Gandhi's defense team maintains that the ED's allegations are baseless and lack legal merit, while the ED insists that the Gandhis and others are guilty of money laundering and conspiracy.
