Enforcement Directorate (ED) has filed a chargesheet naming Congress leaders Sonia Gandhi and Rahul Gandhi in a money laundering case related to the National Herald newspaper.

The two top Congress leaders have been named as accused number 1 and number 2 in the chargesheet. This is the first time a chargesheet has been filed against Sonia Gandhi and Rahul Gandhi.

The chargesheet, submitted on April 9 in Delhi’s Rouse Avenue Court, was reviewed by Special Judge Vishal Gogne.It also names Gandhi loyalist and Congress Overseas Chief Sam Pitroda, and Suman Dubey. The court has scheduled the hearing of cognisance arguments for April 25.

What is the National Herald case?

ED began its probe in the National Herald case after Bharatiya Janata Party (BJP) leader Subramanian Swamy filed a complaint in 2014, accusing Sonia, Rahul and other senior Congress leaders of taking over the Associated Journals Limited properties for a mere sum of ₹50 lakh.

The properties are worth over ₹2,000 crore.

The case is about the day-to-day functioning of Young Indian Private Limited (YIL). Sonia and Rahul are being probed about the ownership of YIL by the Gandhi family and its shareholding pattern in AJL, the company that runs the National Herald newspaper.

Sonia and Rahul Gandhi each hold a 38 per cent stake in Young Indian, making them its majority shareholders.

What are the charges against Sonia, Rahul?

The charges against the mother-son duo have been filed under various sections of the Prevention of Money Laundering Act (PMLA).

The investigation agency has invoked sections 44 and 45 of the PMLA, accusing Sonia and Rahul of money laundering under Section 3 of the Act. Section 70 of the Act, which deals with offences by companies to establish the vicarious liability of the firms’ office bearers and executives, has also been invoked.

The ED has cited a 2017 Income Tax assessment order alleging that key office-bearers of the All India Congress Committee (AICC), along with the principal officers of AJL and Young Indian, orchestrated a “criminal conspiracy” to take over properties worth ₹2,000 crore belonging to AJL, an unlisted public company, according to news agency PTI.

The National Herald, started by India’s first Prime Minister Jawaharlal Nehru, was published by the AJL. In 2010, the AJL, which faced financial difficulties, was taken over by a newly-floated YIL with Suman Dubey and Sam Pitroda, both of them Gandhi loyalists, as directors.

YIL was incorporated with ₹5 lakh and Rahul Gandhi and Sonia Gandhi, among other Congress leaders, as directors. It pledged to do charity but did none until 2016, as per the allegation.

The ED, while attaching₹751 crore worth assets”> ₹751 crore worth assets of AJL and Young India in November 2023, claimed that a criminal conspiracy was hatched to give control of properties worth“hundreds of crores of rupees” of AJL to the “beneficial owners” of Young Indian, Sonia Gandhi and Rahul Gandhi.

99% AJL shares transferred to YIL for ₹50 lakh

Among the allegations by the ED, 99 per cent of AJL’s shares were transferred to YIL—a private firm—for a mere ₹50 lakh, as Swamy flagged in his complaint. Sonia and Rahul each hold a 38 per cent stake in YIL. The remaining 24 per cent was jointly held by the late Motilal Vora and Oscar Fernandes, close associates of the Gandhis, as per the ED.

The ED also alleges in the chargesheet that the accused conspired to convert an outstanding loan of ₹90.21 crore, earlier extended by AICC to AJL, into equity shares worth ₹9.02 crore. This amount was later transferred to Young Indian for a nominal sum, the chargesheet says.

This move gave Sonia and Rahul ‘beneficial ownership’ of AJL’s real estate assets, the chargesheet says.

Young Indian was registered under Section 25 of the Companies Act as a not-for-profit entity. It, however, did not engage in any charitable activities, as per the charges.

The agency has sought punishment for the accused under Section 4 of the PMLA, which provides for a jail term of up to seven years.

Politically motivated: Congress

The Congress has declared a nationwide protest on Wednesday to be held outside ED offices at state headquarters and Central Government offices at the district level.

The party condemns the actions by ED against Sonia and Rahul as politically motivated and a misuse of state institutions aimed at silencing the opposition.