Fresh FIR against Gandhi family in National Herald case: Read how Sardar Patel repeatedly warned Nehru about the newspaper’s financial impropriety decades ago

The National Herald issue has resurfaced after the Economic Offences Wing of the Delhi Police filed a fresh First Information Report (FIR) against Congress leaders Sonia Gandhi and Rahul Gandhi alongside other accused individuals in response to an Enforcement Directorate (ED) complaint. The agency has charged that the party’s top leadership utilised their political position for personal gain.

Sam Pitroda, Suman Dubey, Sunil Bhandari and an unknown individual, along with three organisations, Associated Journals Limited (AJL), Young Indian and Dotex Merchandise Private Limited are featured in the official complaint which was submitted on 3rd October. It pointed out a criminal conspiracy to “fraudulently take over the Associated Journals Limited (AJL),” which is the parent business of the newspaper.

According to the case, the Gandhi family possess a 38 per cent share each in a company named Young India which received Rs 1 crore from Dotex Merchandise, a shell firm situated in Kolkata. For a minimal price of Rs 50 lakh, it then took over the debt of Associated Journals Limited, the publisher of the now-defunct National Herald daily. This enabled Young Indian to take control of AJL’s real estate assets across the country worth over Rs 2,000 crore.

The issue has its roots in 2008, when the National Herald, which was founded by Pandit Jawaharlal Nehru and other freedom fighters, suspended its publication, due to financial constraints and resulted in a debt of nearly Rs 90 crore. The case began in 2012 when Bharatiya Janata Party leader Subramanian Swamy filed a lawsuit in a Delhi trial court. He accused Congress leaders of being complicit in cheating and violation of trust in the takeover of the AJL.

Massive developments have transpired in the last 17 years. Sonia Gandhi, Rahul Gandhi and other perpetrators have been summoned in the case as Income Tax Department and the ED launched separate probes. The Income Tax Department’s findings and Swamy’s complaint served as the foundation for the ED’s formal Prevention of Money Laundering Act (PMLA) case.

Rahul Gandhi has been questioned and AJL property valued at Rs 750 crore were attached. Sonia and Rahul Gandhi had been identified as the principal accused in the ED’s PMLA chargesheet that was presented to the Special MP/MLA court in Delhi.

Blast from the past

As this matter has come back into focus, it is vital to point out that Sardar Vallabhbhai Patel has similarly questioned Nehru about the National Herald and its dubious functions. He expressed worries about the newspaper’s financial operations and warned about possible abuse of political power in fundraising along with crony capitalism. His cautionary remarks, however, were met with denial and ambiguous reassurances.

According to the book “Sardar Patel’s Correspondence,” Patel and Nehru corresponded about the matter in a number of letters in May 1950. On 5th May, Patel wrote to Nehru and outlined that National Herald collected money from two shady persons affiliated to Himalayan Airways which fraudulently won contract for night air mail service from government.

He outlined, “Bahadur and Subia Shumshere Jung Bahadur Rana each gave a sum of Rs. 25,000 for the National Herald. Another sum of Rs. 25,000 was given by Subia Shumshere Jung Bahadur on 2nd December 1949. These two gentlemen are connected with Himalayan Airways who, as you know, were given night air mail charter in circumstances which are known to you. Their charter was renewed last January. Previous to this charter, they did not come to notice for any prominent civil aviation activity. In fact, there were adverse reports against them, one of which, I understand, came from the Indian Air Force.”

Patel also emphasised that another such individual named Akhani not only donated to the National Herald but also facilitated funding from various sources. He mentioned that “Akhani first firm secured the night air mail contract in January 1949 without any advertisement or tenders being invited and in circumstances which evoked not only protests but veiled allegations of manoeuvrings from firms like the Tatas and the Air Services of India. I am told that Akhani was responsible for arranging for other contributions also. The fact that these contributions are on the same date and from Bombay is significant. The company went into liquidation only about a month after the contract was given.”

He also highlighted Rs 5,000 provided by Husainbhai Lalji who “has been involved in a case of cheating the Government and has made frantic efforts to have the case withdrawn, which I have consistently refused to. The case against him and his four sons is now committed to the Sessions Court, Bombay.”

Patel remarked that “these credits to the National Herald should be taken to be connected with official favours received by the gentlemen mentioned above.” He added, “It is also bound to subject ourselves to criticism for the manner in which the National Herald is securing assistance from persons who are associated with the activities of Government. I need hardly add to what I have already told you on this subject.”

Additionally, he raised concerns about then Union Minister Rafi Ahmed Kidwai, who was seeking money from suspicious businessmen, including Lucknow’s JP Srivastava.

Nehru attempts to placate Patel who sent a second letter to address the fundamental issue

Patel repeatedly focused on the issue and was unreserved in his language, but his direct and honest questions received vague and dismissive answers from Nehru. He distanced himself from the financial affairs of the National Herald. Nehru also claimed that he had asked his son-in-law, Feroze Gandhi, to address the issue. The latter was serving as the General Manager of the newspaper, at the time.

On 6th May, Patel sent another letter conveying that the donations lacked any element of charity and were founded in private interests. He mentioned that both Ranas and Akhani not only contributed to National Herald but also maintained a close relationship with the ministry led by Kidwai.

“It is also an open secret that the minister’s association with the National Herald has all along been close and intimate. Obligations and associations of this character are not necessarily objectionable merely if they take place near enough a particular official transaction. Even spread over certain periods they provide opportunities for the persons concerned to create a vested interest in the department,” he observed.

Patel also challenged the flimsy justifications given by Nehru with concrete facts. He stated, “You say that Himalayan Airways started some time afterwards. One of the transactions you will recall relates to 2 December 1949. Himalayan Airways renewed their charter for night air mail in January 1950 and since October 1949 their charter had already been going on.”

“You have referred to contributions for charitable purposes from industrialists and others who might have business with Government. The transactions which I referred to you are of a different nature. There is no question of charity about it,” Patel further stressed. “A minister would, of course, have to consider whether the timing of any of the contributions is such as might be embarrassing to Government,” he added.

Nehru reiterated that he had not been engaged with the paper’s finances for a period of three years and alleged that he had entrusted the responsibility to a person named Mridula. He acknowledged that “some mistakes may have occurred,” but he dismissed Patel’s reservations by arguing that it was a question of “profit and loss” rather than morality.

Nehru’s indifference and failure to accept accountability marked the breaking point for Patel, who, in a final letter dated 10th May, expressed, “I feel it useless to pursue the matter further. I have already told you how I view these activities and that it is doubtful if in any other province if I had anything to do with this matter, this position would have been tolerated by me.”

“You seem to suggest that contributions come to the National Herald because it is a fairly good business proposition and its preference shares and debentures are not a bad investment. My own information gathered from those who have invested in the National Herald indicates otherwise,” he reaffirmed. Patel even voiced skepticism regarding Nahru’s assertions that Kidwai had stepped down from his position as director.

Conclusion

The National Herald has always been permeated by these unsavoury operations and the Nehru-Gandhi family has perpetually been under a cloud of suspicion, not only due to their inability to accept the questionable activities of the company even 75 years ago but also for deliberately ignoring the serious issues associated with it.