National Herald case: 'Congress was aware,' ED alleges conspiracy to take over ₹2,000 cr AJL firm
The ED filed a charge sheet against Sonia Gandhi, Rahul Gandhi, Suman Dubey, Sam Pitroda, Young Indian, Dotex, and Sunil Bhandari. ASG Raju noted, the Congress provided a loan of Rs90.25 crore to AJL, which had no means to repay despite holding assets worth ₹ 2000 crores.
Raju alleged that the accused tried to take overAJL by setting up a new company called Young Indian, which was controlled by the Gandhi family. The ED said Young Indian got control of AJL for just ₹ 50 lakh, in return for a ₹ 90 crore loan given to AJL by the Congress party.
The ED further stated that the accused firm, Dotex, gave a ₹ 1 crore loan to Young Indian, out of which ₹ 50 lakh was paid to the All India Congress Committee (AICC). Consequently, Young Indian became the owner of AJL for Rs. 50 lakh.
ASG Raju argued how can a company with less than ₹ 5 lakh to take over another company holding assets worth ₹ 2,000 crore. He pointed absurdity of the transaction. Despite AJL's ₹ 2000 crore assets, it struggled to manage daily affairs. Raju argued that a sensible person would have sold some of those assets to clear the ₹ 90 crore loan, which was small in comparison to the company's total worth.
The ASG alleged that the AICC conspired to usurp AJL's assets through Young Indian, created to siphon off ₹ 2000 crore in exchange for the ₹ 90 crore loan. The Additional Solicitor General (ASG) S.V. Raju questioned why the All India Congress Committee (AICC) gave another loan to Associated Journals Limited (AJL) when the company was unable to repay the earlier loan, asking why a prudent person would do this.
Special Judge Vishal Gogne heard the arguments at length for nearly three hours and listed the matter for further hearing on July 3.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Hans India
29 minutes ago
- Hans India
MP: Nearly 1 lakh meritorious students to get laptops; state to shell out Rs 239cr
Bhopal: In a major push to promote digital learning and reward academic excellence, the Madhya Pradesh government will distribute laptops to 94,234 meritorious students under the 'Pratibhashali Vidyarthi Protsahan Yojana" on Friday, July 4. The initiative, aimed at empowering students who have scored 75 per cent or more in the Class 12 board examinations conducted by the Madhya Pradesh Board of Secondary Education (MPBSE), involves a financial outlay of Rs 238.98 crore. Chief Minister Mohan Yadav will preside over the state-level distribution ceremony in Bhopal. He wrote on his X handle: "I'm delighted that on 4th July, we will extend financial incentives of Rs 25,000 each to 94,234 students who have scored 75 percent or above in the Class 12 MP Board examinations.' He further said "this reflects our commitment to nurturing a generation of empowered youth who will contribute to realizing the vision of a developed India under the leadership of our Prime Minister Narendra Modi". Under the scheme, each eligible student will receive Rs 25,000 directly to their bank account to purchase a laptop of their choice. This direct benefit transfer model not only ensures transparency but also allows students the flexibility to select devices that suit their academic needs. The scheme is part of the state's broader commitment to fostering digital literacy and supporting higher education aspirations among youth. The "Pratibhashali Vidyarthi Protsahan Yojana" which has been operational since 2009–10, has so far benefited over 4.3 lakh students, with more than Rs 1,080 crore disbursed in total. Last year alone, 89,710 students received financial assistance under the scheme. The 2025 edition marks a significant scale-up, both in terms of beneficiaries and budget. According to official sources, the scheme covers both regular and self-taught students from government and recognised non-government schools. The eligibility threshold for general category students is 75 per cent, while students from Scheduled Castes and Scheduled Tribes qualify with 65 per cent marks. The initiative aligns with the state's vision of building a digitally empowered generation and complements national efforts under the Digital India campaign. With timely disbursement and a transparent selection process, the scheme continues to be a model for educational support programmes across the country.
Time of India
29 minutes ago
- Time of India
Insolvency proceedings cannot sidestep PMLA process: NCLT
Proceedings under the Insolvency & Bankruptcy Code cannot be used as a mechanism to "frustrate or sidestep" the process going under the Prevention of Money Laundering Act , the National Company Law Tribunal (NCLT) said. Rejecting the plea for dissolution of Shakti Bhog Snacks , which is under the lens of the Enforcement Directorate (ED) with a special PMLA Court taking cognisance of the complaint filed by the probe agency, NCLT said it "would amount to judicial overreach ". This will also "impair the ED's ability to complete its investigation, pursue trial, and recover proceeds of crime," said NCLT while dismissing the plea of the Resolution Professional of Shakti Bhog Snacks. A two-member NCLT bench further said the Supreme Court has already held that NCLT and the appellate tribunal NCLAT do not have jurisdiction to interfere with proceedings or orders passed under the PMLA, including attachment orders or criminal prosecution. "In view of the foregoing, we are of the considered opinion that permitting dissolution despite the pendency of the Special Court's cognizance over the Corporate Debtor would amount to judicial overreach and would impair the ED's ability to complete its investigation, pursue trial, and recover proceeds of crime," said a 14-page-long order by NCLT. Live Events NCLT cannot assume jurisdiction in a manner that would render Shakti Bhog Snacks unavailable for criminal liability, particularly when it stands named as an accused, and assets, however meagre, are under attachment. "It is not the quantum but the character of the proceedings that is determinative," said the NCLT bench comprising Members Sanjeev Ranjan and B V Balram Das. Shakti Bhog Snacks Ltd (SBSL) is the group company of Shakti Bhog Foods Ltd (SBFL), which was once a leader in the wheat flour segment. Insolvency proceedings against SBSL were initiated by NCLT in January 2023 after default was established by one of its operational creditors. It also appointed an interim resolution professional, who also formed the Committee of Creditors (CoC) as per the provisions of the IBC. However, RP could not get control of SBSL's physical assets and records as it was sealed by the Enforcement Directorate. Moreover, the company was not in operation. No person was available, and its land and building situated at Noida were already sold by the State Bank of India under the SARFAESI Act. Moreover, in CoC, SBI was the sole member, and it could not even liquidate SBSL due to the absence of assets, records, operations, and personnel. The CoC recommended dissolution of SBSL instead of liquidation and the RP approached NCLT, filing plea under Section 54 of the IBC for dissolution. NCLT on August 20, 2024, issued notice to the Registrar of Companies, Income Tax Department and others. After that, ED filed its reply before NCLT, opposing the dissolution of Shakti Bhog Foods, in view of the ongoing proceedings under the Prevention of Money Laundering Act, 2002 (PMLA). ED submitted that SBFL defaulted in repaying its loan obligations, and its account was classified as NPA and total outstanding dues to the consortium of banks stand at approximately Rs 3,269.42 crores as on 31.03.2020. ED submitted before NCLT that investigation revealed that Shakti Bhog Snacks, along with Shakti Bhog Foods was involved in the activities related to money laundering. SBSL acquired and possessed proceeds of crime to the tune of Rs 97.87 crore from six group entities of SBFL, the probe agency submitted before the insolvency tribunal. It transferred Rs 127.81 crore to these six group entities from FY'08 to FY'15 in the guise of investment and sale-purchase. The name of Shakti Bhog Snacks was used by Shakti Bhog Foods to rotate its loan funds against bogus invoices. The company layered and siphoned off the proceeds of crime received from Shakti Bhog Foods and further transferred them to the directors/promoters and their relatives. "The ED further submitted that SBSL carried out these transactions without any actual movement of goods. The group companies of SBFL involved in these transactions were shell entities, and no genuine business activities were conducted therein," said NCLT order while recording ED's submission. These transactions were carried out to inflate the financials of SBFL so that more credit facilities could be availed from banks," it said. Consenting to it, NCLT said: "Dissolution under Section 54 of the IBC results in the Corporate Debtor ceasing to exist as a legal entity. Such a consequence would inevitably frustrate the ongoing criminal prosecution under the PMLA and defeat the authority and jurisdiction of the Ld. Special Court, which is statutorily vested with the power to try offences under the PMLA and adjudicate upon related attachments and confiscation proceedings," it said.
&w=3840&q=100)
Business Standard
31 minutes ago
- Business Standard
Prepayment penalty ban to hurt NBFCs more than banks, say experts
The fee income of banks and non-banking finance companies (NBFCs) will come under pressure following the Reserve Bank of India 's decision to bar prepayment penalties on fresh loans for micro and small enterprises, effective from 1 January 2026. However, the impact on NBFCs will be more significant compared to commercial banks, experts said. NBFCs have around 5-25 per cent of their assets under management (AUM) in floating-rate micro, small, and medium enterprises (MSME) loans, which will be impacted, as the majority of them charge 2-5 per cent prepayment penalties. At the same time, fee income for banks is less than 1 per cent of their total income, so the impact of these changes will be minimal on banks, industry experts said. 'It will have a negative impact on the non-operating income component of the regulated entities, which are focused on MSMEs and have longer-tenured floating-rate loan products,' said Sachin Sachdeva, Vice President, Financial Sector Ratings, ICRA Limited. 'Nevertheless, with these directions, the central bank has tried to harmonise the practice across lenders, given the divergent practices among banks and NBFCs, and at the same time, it increases the affordability of financing for micro and small enterprises,' he added. An exception was made for small finance banks, urban co-operatives, and regional rural banks, as these entities are barred from charging such penalties on loans up to Rs 50 lakh. The directions are applicable irrespective of the source of funds used for prepayment of loans, either in part or in full, and without any minimum lock-in period. NBFCs such as PNB Housing Finance, Aditya Birla Capital, and Piramal Enterprises are expected to be impacted the most, as they account for the majority of floating-rate MSME loans and loans against property (including MSME loans). According to an IIFL Securities report, PNB Housing Finance accounts for 27 per cent of floating-rate MSME loans, followed by Aditya Birla Capital, which holds 26 per cent, and Piramal Enterprises, which accounts for 22 per cent. The report also indicated that there would be a material increase in competitive intensity in loans against property and floating-rate MSME loans, reducing their profitability structurally as exit barriers are removed. 'Banks and large NBFCs with lower cost of funds will be able to partially offset this by increasing the share of more granular and higher-yielding customers within these segments,' the report said. 'Currently, we levy a 4 per cent fee/penalty on full early payment and 2 per cent for part pre-payment. With these changes, we will have to bear a loss of 2-4 per cent,' said an official with an NBFC. Meanwhile, the impact on banks will be limited, as fee income is near 1 per cent of a bank's total income, bankers said. 'As a bank, pre-payment fees account for just 0.5-0.6 per cent of total income, so the impact will be minimal. Earlier, we could enter into a lock-in period for pre-payments; now we have to forego that,' said a senior banking official at a public sector bank. From a customer's perspective, the circular on prepayment charges is a positive move by the regulator to ensure that customers are protected from prepayment charges upon loan closure, said Sanket Agrawal, Chief Strategy Officer, SBFC Finance. 'However, it is important to note that the circular applies to floating-rate loans sanctioned on or after 1 January 2026, which means that the loan book as of today does not get impacted. Also, a borrower does not typically close a higher-tenure loan in the first few years, and therefore the impact of the circular on prepayment fee income of finance companies will be at a lag. This circular helps borrowers access credit at a fair price in their long-tenure repayment cycle,' he said.
