An audio-visual recording of Congress leader Rahul Gandhi's statements is underway at the offices of the Enforcement Directorate (ED), with the sleuths summoning the Gandhi scion for the third consecutive day. Gandhi has been questioned for nearly 21 hours over two days till now.
Rahul, a Z-plus VIP security protectee (the highest security cover after the prime minister’s Special Protection Group), was ushered to an interrogation room to reply to a bundle of questions posed by the investigating officer. The official, an assistant director in the ED, has a long list for Rahul. There will be questions on the shareholding patterns. There will be queries on the transfer of shares of Associated Journals Ltd (AJL), the holding company that publishes the newspaper National Herald, to another company called Young Indian Ltd, resulting in alleged illegal benefit of Rs 414.40 crore in the form of several immovable properties which the ED claims was accrued by the Gandhi family.
Rahul was questioned for close to ten hours on Monday and eleven hours on Tuesday. A lunch break of one hour was allowed on both days, as Rahul said he eats home-cooked food and politely declined the lunch cooked in the ED premises.
As per rules for Central protectees, two personal security officers (PSOs) accompanying Rahul were allowed inside Pravartan Bhawan, the newly constructed and highly-guarded headquarters of the ED.
Rahul is taking his time to reply, his statement is being typed, and each page is being signed by him as per his request, highly placed sources said. The point he is sticking to during his questioning is that the company in question—Young Indian Ltd—has been created under Section 25 of the Companies Act, which is a not-for-profit company, and no dividend can be given to its shareholders or directors. According to the Act, a Section 25 company is a charitable company, prohibiting payment of any dividend to its members.
But, the investigator isn’t convinced. Sources said Rahul is being confronted with documentary evidences that point to the contrary, and have been put under lens of various judicial forums—including Income Tax Department, Income Tax Appellate Tribunal, and the Delhi High Court.
The investigator, who registered an Enforcement Case Information Report in 2021 (an ECIR is widely seen as an FIR, but is an internal document of ED), confronted Rahul, claiming that the immovable properties of Associated Journals Limited (AJL) of more than Rs 800 crore had been taken over by Young Indian, solely owned by the Gandhi family through fraudulent means, committing an offence of cheating and criminal conspiracy.
The basis of the money laundering case by the ED is the Delhi Metropolitan Magistrate's Court order, which has already taken cognisance of the offences under sections 403, 406, 420, 120B of Indian Penal Code (IPC), which led to takeover of properties of AJL by Young Indian.
In 2014, the court had issued summons to Sonia Gandhi, Rahul Gandhi and others who are currently on bail. The appeal of Gandhi family against the magistrate's judgement before Delhi High Court was dismissed, and the Supreme Court too dismissed the appeal.
Strongly rebutting the Congress defence that "no money laundering" has taken place, and that the ED has made a fake case, ED officials said the offence under sections 420 and 120B are the "scheduled offence under the PMLA", and Young Indian has taken over these properties worth of more than Rs 800 crore as sequel to these offences. Accordingly, the amount of Rs 800 crore (value of the properties) is "proceeds of crime" under the PMLA.
"Since Young Indian has acquired properties of AJL worth of Rs 800 crore, and has been using and possessing the same, it is an offence under Section 3 of the PMLA. It is a matter of record that these properties have been put for commercial use for earning rent," said an investigator.
Rahul was also questioned about the details of the "charitable activities", as the investigating officer is learnt to have confronted him with evidence showing that Young Indian was not carrying out any charitable activity since 2010, and has been engaged in commercial business. Rahul was grilled on the claim that the benefit will go for charitable purpose is an untenable argument.
ED sources said due diligence was done to study the records before the case was registered. Under Section 3 of PMLA, the offence of money laundering has been defined as attempts "by any person directly or indirectly to indulge or knowingly assist or knowingly is party or is actually involved in any process or activities connected with any property derived or obtained as a result of criminal activities as defined in schedule to PMLA".
"It is wrong to say that offence of money laundering deals only with movement of cash inside and outside the country," said a sleuth.
ED investigators are also citing the order of the Income Tax Appellate Tribunal in March this year, which spoke of a "corporate veil" used to hide the proceeds of crime. "If we see the transaction that has taken place in the present case, with regard to how the transfer of shares between AJL and Young Indian took place, we find that, within a period of three months between November 23, 2010, and February 26, 2011, Young Indian was constituted and took over the right to recover a loan of more than Rs 90 crores from AICC for a consideration of Rs 50,00,000 and thereafter replaced the original shareholders of Young Indian by four new entities.''
The order further said: ''The four new entities, including Moti Lal Vohra, chairman of AJL, and Young Indian, after acquiring 99 per cent shares in AJL, became the main shareholder with four of its shareholders acquiring the administrative right to administer the property of more than Rs 400 crore."
It is on these points that the ED is questioning Rahul. It is surmised by the ED, as well as the IT department, is that there is no distinction between the two entities and the entire transaction of transferring shares of AJL to Young Indian was allegedly a “clandestine and suspicious transfer of the liquidated interest in the premises to Young Indian".
There doesn't seem any relief ahead for Rahul Gandhi, even as Congress president Sonia Gandhi has been summoned on June 23.
