Congress defends loan as "emotional issue"

Last Updated: Sat, Nov 03, 2012 20:06 hrs

The ruling Congress party on Saturday said that the allegedly illegitimate loan it gave to purportedly revive a defunct newspaper started by former Prime Minister Jawaharlal Nehru, was an "emotional issue".

Reviving the National Herald newspaper, started by the Independence-era party icon, was an emotional issue and so the "interest free loans" given for it were not illicit, Congress general secretary Janardan Dwivedi said.

"It is an emotional issue for us...only Congress will decide what is political activity for it and no other party," Dwivedi said.

The statement came after Janata Party chief Subramanian Swamy said that he will file a petition before the Election Commission of India seeking the de-recognition of the Congress party over the matter.

"Based on Congi confession of the loan crime yesterday I am filing a Petition today before ECI seeking De-recognition of Congi party," (Based on Congress´ confession of the loan crime yesterday, I am filing a petition before the ECI seeking de-recognition of Congress party) said Swamy through his micro-blogging site Twitter handle @Swamy39 on Saturday.

The move came in the wake of the Congress admitting on Friday that it had given "interest free loans" to revive the defunct newspaper.

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 concession came after Congress party president Sonia Gandhi and his son Rahul Gandhu were accused by Swamy of committing fraud for financial gain.

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, adding that 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. 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 had "advised" Gandhi to file a defamation suit against him.

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