Congress admits to giving "Rs 90 crore loan"

Last Updated: Sat, Nov 03, 2012 01:53 hrs

India's ruling Congress party on Friday said it had given "interest free loans" to revive the defunct National Herald newspaper, started by Independence-era party icon Jawaharlal Nehru, a day after being accused of flouting laws to lend the money.

Even though it conceded that it had indeed made "interest-free loans" of unspecified amount, the party said "no commercial profit has accrued to the Indian National Congress" from the transactions.

"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," it said.

Janata Party chief Subramanian Swamy on Thursday accused Congress party president Sonia Gandhi and his son of committing fraud for financial gain.

The Gandhis had struck a "a stinking deal" where they floated a private company which then went on to illicitly acquire a public limited company that has valuable property in Uttar Pradesh and Delhi, he said.

The former Harvard tutor alleged that the Congress gave an unsecured loan of Rs 90 crores to the company that was acquired by the Young Indians, a firm that is purportedly controlled by the Gandhis.

According to Swamy, the Gandhis together owned 76 percent of a company named Young Indians, which was incorporated in November, 2010, and allegedly went on to acquire the Associated Journals, which was founded by Jawaharlal Nehru and others in 1938.

Swamy claimed that Associated Journals was given an unsecured loan of 90 crores from the Congress party, in a move that flouted the Income Tax Act which states that a political party cannot give loans for commercial purposes.

While Young Indians wrote off the loan for 50 lakhs, and by a board resolution, the Associated Journals was sold by transferring its shares to Young Indians, the public firm morphed into a private company, Swamy said.

According to the opposition leader, the deal was a conspiracy to grab prized property owned by Associated Journals in Uttar Pradesh and Delhi, including the Herald House in the capital, which, he said, is worth Rs 1,600 crores.

The Congress promptly dismissed the allegations with Congress spokesperson Janardhan Dwivedi, saying: "In every society and country, you have some characters. The person you are referring might be one of them who could speak anything, anytime."

Rahul Gandhi's office also rubbished the charges and in a strongly-worded letter to Swamy, described the charges as "scandalous abuse" and "as utterly false, baseless and defamatory", and said it was "committed to pursuing all legal actions".

Responding to the letter, Swamy chief on Friday ´advised´ Gandhi to file a defamation suit against him.

"Either, Rahul Gandhi or his lawyer sends a letter to me, I will throw of these papers in the dustbin without reading it," Swamy told media.

"My advice to Rahul Gandhi is- grow up, go to the court and file a defamation case. I will fight him there," he said.

Bharatiya Janata Party (BJP) leader Arun Jaitley earlier in the day demanded an answer from the Congress on the charges made against Gandhis by Janata Party chief Subramanian Swamy.

"Swamy has raised important issues yesterday. Does Congress have an answer?" Jaitley said while addressing a press conference here.

"Congress should explain the charges made by Swamy. We want a reaction from the Congress," Jaitley said.

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