The Associated Journals Limited

The National Herald scam is an ongoing case in a Delhi court filed by Indian economist and politician Subramanian Swamy against politicians Sonia Gandhi and Rahul Gandhi, their companies and associated persons. As per the complaint filed in the court of the Metropolitan Magistrate, Indian National Congress granted an interest-free loan of ₹90.25 crore (US$14 million) to Associated Journals Limited (AJL), owner of the National Herald newspaper which was established by Jawaharlal Nehru and other freedom fighters in 1938. It was alleged that the loan was either not repaid or repaid in cash, which is in violation of Section 269T of the Income Tax Act, 1961. A closely held company, Young Indian, was incorporated in November 2010 with a capital of ₹50 lakh (US$78,000) and it acquired almost all the shareholding of AJL and all its properties (alleged to be worth ₹5,000 crore (US$780 million)). Swamy alleged criminal misappropriation by both Sonia Gandhi and Rahul Gandhi. The courts have determined that a prima face case has been established in the matter.

Associated Journals Limited (AJL) is an unlisted public company limited by shares, incorporated on 20 November 1937, with its registered office at Herald House, 5-A, Bahadur Shah Zafar Marg, New Delhi. It was the brainchild of Jawaharlal Nehru but it was never his personal property as it was started with the support of about 5,000 freedom fighters who became shareholders of AJL. The company's capital was ₹5 lakh (US$7,800) divided into 2,000 preferential shares worth ₹100 (US$1.60) each and 30,000 ordinary (equity) shares worth ₹10 (16¢ US) each. Apart from Nehru, AJL's Memorandum of Association was signed by stalwarts such as Purushottam Das Tandon, Acharya Narendra Dev, Kailash Nath Katju, Rafi Ahmad Kidwai, Krishna Dutt Paliwal and Govind Ballabh Pant. The company did not belong to any particular person, nor did it want to be associated with any business except news. AJL had 1,057 shareholders as of 29 September 2010 as per the annual return filed by the company with the Registrar of Companies.

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