Behind the National Herald Case, Lies a Tragedy

The National Herald controversy takes India’s political life to a new low.  In the old world, events like these would be called highly immoral, and in modern times utterly unethical, but they mean the same thing – wrongful and shameful things to happen. Courts are looking into all connected incidents to determine if they are crimes.  There is something else we must look at.

Details coming out in the National Herald affairs hold a sordid tragedy.  Consider some accepted facts – which should be accepted by the Congress Party itself – to gauge the scale of the tragedy and the shame it brings along.

1. The Congress had lent Rs.90 crores to Associated Journals Limited (AJL), the company that published the daily newspaper National Herald - which stopped for good in 2008.

2.     Young Indian is another company, a closely held charitable company formed in 2010, in which 76% of its shares are collectively held by Congress President Sonia Gandhi and her son Rahul Gandhi – enough to give them authority to take every decision for that company.

3.   AJL, though not doing anything, owns immovable properties valued between Rs.2,000 crores and 5,000 crores.  It has about 761 shareholders.  (Another report says the number is 1,057 – but that does not affect the story). Between them they held all its share capital, until one event happened.

4.    The Congress transferred to Young Indian all its rights to receive Rs.90 crores from AJL.  In return, Young Indian paid the Congress – hold your breath – just Rs.50 lakhs.    The Congress accepted it for transferring its right to collect Rs.90 crores from AJL and wrote off the balance Rs.89.5 crores as irrecoverable.  With that transfer, AJL had to pay back Rs.90 crores to Young Indian instead of the Congress.

5.    If Young Indian could get Rs.90 crores from AJL, or get anything even more valuable from AJL, the Congress Party loses from its foolish bargain – or obedient act – all that Young Indian gains. Young Indian did get that more valuable thing, and got it in an amazingly quick time of two months after acquiring the debt.

6.     AJL had only one debt to repay, which was that Rs.90 crores.  AJL paid it back to Young Indian in a special way.  Instead of paying money, AJL issued to Young Indian new shares in AJL for Rs.90 crores in value.  Here lies a twist, as it means much more than AJL clearing its debt. With that issue of shares, all the poor existing shareholders of AJL suffered the greatest loss.  This is how it was.

7.  With AJL’s new shares for Rs.90 crores going to Young Indian, the holding of the 760-odd shareholders in AJL’s share capital instantly plummeted from 100% to a pitiful 1%.  This means their notional entitlement in the value of AJL’s assets got depleted likewise, from about Rs.2,000 crores to Rs.20 crores – with a stake in the balance Rs.1,980 crores going away to Young Indian.  If AJL’s assets are really worth Rs.5,000 crores, the drop in the market value of their shareholdings is from Rs.5,000 crores to Rs.50 crores while the market value of Young Indian’s shareholding in AJL would zoom to Rs.4,950 crores. So finally, that is what Young Indian got in return for Rs.50 lakhs it paid to the Congress Party.  Any 10-year old may guess that no existing shareholder of AJL would have sensibly or smilingly agreed to take a 99% loss in value of his or her shareholding and stand by watching Young Indian strike such a huge bonanza.  That child, if asked to decide for the Congress, could also wonder whether it was wise or ethical to give away a 90-crore-rupees-recoverable to another company for a measly Rs.50 lakhs and watch that company acquire a fortune stake in AJL two months later.  And remember, Sonia Gandhi and Rahul Gandhi have influential voices within the Congress and a 76% holding in Young Indian.        

The Congress Party has a historic place in the country, since it pioneered India’s fight for freedom and ran the Central government longer than any other political party.  As our democracy is still taking shape, the Congress and its front-ranking personalities must set an example in walking the straight path. But Sonia Gandhi and Rahul Gandhi who are viewed as monarchs in their party have failed here so obviously. 

If chiefs of smaller or regional political parties did what Sonia and Rahul have done for themselves with Young Indian, it would be equally wrong but not so much of a national affliction.  When the grand old Congress Party and its topmost two leaders are themselves in this sorry picture, heads of other parties with similar cunning genes would feel less troubled about whatever misdeeds they performed till now, would smile within themselves and feel encouraged to do more.  After all, how a big brother is allowed to behave, or is kept in check, tells on the smaller ones.

The list of things to bemoan is not over.  Let me explain. Bal Gangadhar Tilak, Lala Lajpat Rai, C.R. Das, C. Rajagopalachari, Jawaharlal Nehru, Sardar Patel and many like them were active in India’s freedom movement.  They had one thing in common. Yes, Mahatma Gandhi too came in that category. That is, they were all competent lawyers.  They were deeply devoted to their cause and had high integrity in public life.  You cannot imagine any of them heading the Congress Party in their times and doing anything like what Sonia Gandhi is called to answer now. 

 If Sonia Gandhi and Rahul Gandhi cannot be seen in high honour in the National Herald matter – I am not talking of legalities at all, as I said – they should take just 50% of the blame.  A few other persons who are not legally charged should take the rest of the blame, the other 50% of it.  That should be clear when we see something connected.  The long-winding alleys, by-lanes and dark corners of law thought out and laid for the two Congress leaders in their takeover transactions could have originated only from deep-thinking lawyers.  And finally, or from the beginning, the plans would have been passed by a few leading lawyers who are front-ranking Congressmen – and to them the remaining 50% of the blame belongs.  Here is why.

In pre-independence days, any lawyer who was a leader in the Congress Party would not have advised any other leader – lawyer or not – to be part of anything that Sonia and Rahul have done now.   If today’s lawyer-leaders of the Congress had advised the mother and son against takeover of AJL in this fashion – that is, even if the takeover plan had been drawn up by others – because any day all these transactions could get exposed, the law could catch up with them and unpredictable results might follow, the two of them would have saved some good honour for themselves.  A loss of honour this way for the President of the Congress and her son, its next in command, is more of a national shame than when it happens with any other party.  The shame gets bigger when it concerns a daughter-in-law in the family of Jawaharlal Nehru, an illustrious Congress leader who valued personal honour.  Leading lawyers of the Congress Party who were concerned with the takeover plans should be keenly aware of all this. Yet they favoured the idea, with all their legal and worldly knowledge – and should take 50% responsibility for the public shaming of a grand old party and its President and her son. 

I am not bashing Congress lawyers needlessly or crossing the line and getting personal against front-ranking lawyers of the Congress Party.  Well-known lawyers of the same party were held in high esteem for all their service and sacrifice during the freedom struggle.  Their cause was noble, and their actions right.  So they got due acclaim from Indians.  If today’s leading lawyers of the Congress Party, who are also public figures in the political arena, did not have a good cause and if their actions were not right in the roles they played for the Congress, Young Indian and AJL, they will get the flak they deserve.  What a tragic fall!

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Copyright © R. Veera Raghavan 2016