The controversy over the transfer of shares and ownership of the properties and assets of The Associated Journals Ltd to Young Indian, a private firm owned mainly by Sonia Gandhi and Rahul Gandhi, raises several questions of legality and morality in the conduct of affairs of the Jawaharlal Nehru-founded company from its inception to its recent contentious dissolution.
These merit a full inquiry into the functioning of the company as well as the plethora of trusts and entities associated with the Nehru-Gandhi dynasty to determine if they functioning as per their mandate or should be wound up. It is pertinent that former Prime Minister Chandra Shekhar had urged Dr Manmohan Singh before his death in 2007 to takeover all trusts he was associated with so that the properties were not misused by persons not associated with the original mandate for which they were created.
Associated Journals was set up at the initiative of Jawaharlal Nehru on 19 November 1937 (birthday of his daughter Indira) under the Indian Companies Act, 1913. It had a capital of Rs. 5 lakh divided into 2000 Preference Shares of Rs. 100 each carrying a fixed but non-cumulative dividend of 5 per cent per annum and 30,000 ordinary shares of Rs. 10 each.
The Memorandum of Association announced its objective, “To establish and to carry on in the United Provinces and elsewhere the business of news agency, newspaper and magazine proprietors, printers and publishers and all similar and incidental trades thereof and in this connection to do all such things as may appear to the Directors to be in the interests of the Company” [3 (a)].
The signatories included: Jawaharlal Nehru, Purushottamdas Tandon, J Narendra Deva, Kailash Nath Katju, Rafi Ahmad Kidwai, Mohan Lal Sakra and Krishna Dutta Paliwal; the document was witnessed by Govind Ballabh Pant.
That this venture was intended to be commercially viable is stated in article 3 (d) that the Company may carry on any other business “which may seem to the Company capable to being carried on in connection with the above or calculated directly or indirectly to enhance the value or render profitable any of the Company’s property or rights”.
Though its founders became the ruling establishment of independent India, National Herald, Qaumi Awaz and other papers launched by them never acquired the iconic status of Bal Gangadhar Tilak’s Kesari, Sri Aurobindo’s Bande Mataram, and others that the British Raj crushed with unsparing brutality. After independence, the Herald Group survived on crutches provided by the ruling party and family until even that became unsustainable.
Janata Party leader Subramanian Swamy at a press conference on November 1, 2012, pointed out that in the list of shareholders furnished to the Registrar of Companies, as many as 80 per cent were dead and many firms defunct.
This is no clerical error but points to a deeper malaise, namely, that after assuming the reins of power in Delhi, the family of the first Prime Minister began to regard and treat the National Herald group as personal property. As most outsiders thought it was a public trust, no one questioned the manner in which it functioned until its sale to Young Indian opened a proverbial can of worms.
Taking up only familiar names, we find among shareholders listed as extant on September 2011, Jawaharlal Nehru of Anand Bhawan, Allahabad. Nehru died in 1964.
Co-founder Rafi Ahmad Kidwai died in 1954. The 2011 list mentions Feroze Gandhi (died 1960); Indira Nehru Gandhi (died 1984); Ghanshyam Das Birla (died 1983); NS Pandit and Vijay Lakshmi Pandit (she died 1990); Kailash Nath Katju (died 1968); Dr Radha Kumud Mukherji; former Chief Justice of India Mirza Hameedullah Beg (died 1985); Yagya Dutt Sharma (died 1996); Sucheta Kripalani (died 1974); Yashpal Kapoor; Mohammed Yunus (died 2001); BRCC president Rajni Patel; Jitendra Prasad (died 2001); H.Y. Sharda Prasad (died in 2008); Lalit Suri (died in 2006).
Many firms are long extinct. One shareholder, Punjab Pradesh Congress Committee, is possibly not legal as a political party cannot enter into any commercial activity.
The list reflects that from its inception in 1937, Associated Journals did not deem fit to maintain its records properly. When shareholders died, their legal heirs / nominees did not replace them. The same is the case with defunct companies whose promoters and their heirs were entitled to shares of Associated Journals. Keeping defunct shareholders from 1937 to 2011 suggests they comprised a sort of default vote-bank for those controlling the company. The government would do well to determine the legal heirs of these individuals and entities.
That this may not have been an accidental omission can be seen from the fact that from time to time members of the Nehru-Gandhi family and their close associates entered the shareholder list – Indira Gandhi and Feroze Gandhi (later their grandchildren). But other offspring did not.
This brings into focus other trusts associated with the family that have come to light during the current controversy. Late Mohammad Yunus’ address (18 Paschim Marg) is also the address of RD Pradhan who runs Rattan Deep Trust from there and serves as its authorised attorney (2008 list). Rahul Gandhi is also authorised attorney of this trust. He is also associated with Janhit Nidhi, a registered public trust at 1/6 INS Building, Rafi Marg, New Delhi.
In September 2011, Rahul Gandhi and Rameshwar Thakur are trustees and authorised attorney of Rattan Deep Trust and Priyanka Gandhi Vadera (spelling as per list) and Rameshwar Thakur are trustees and authorized attorney of Janhit Nidhi. A full disclosure about the mandate and purpose of these trusts and how and why they acquired shares in Associated Journals would be in order.
NitiCentral, 4 November 2012
http://www.niticentral.com/2012/11/congresss-unique-book-keeping-culture-2.html