New Delhi: Congress leader and eminent lawyer Kapil Sibal on Saturday defended party President Sonia Gandhi and vice-president Rahul Gandhi in the National Herald case, saying that there was nothing illegal in the transactions between Associated Journals Limited (AJL) and Young Indian Limited (YIL).
Explaining the finer details of the case, Sibal told ANI that AJL's loan of Rs. 90 crores was assigned to YIL to revive the company and was done with the consent of the shareholders of the company.
"The company's net worth became negative because whenever they needed, the Congress party gave them loans. Slowly this loan amount became Rs. 90 crores and the company net worth became negative. Congress decided to keep the company alive as Nehru ji had sentiments attached to it. To revive the company, a company was floated by the name Young India which is a section 25 company, it was a non-profit company," he said.
"The Rs. 90 crores debt of the AJL was assigned to the Young India company. After this the AJL increased its shareholding and the shares were given to Young India. So the debt was no longer there, it was converted to shares and given to Young India. So, 99 percent of AJL's holding came to Young India," he added.
He said that there was nothing wrong in giving loan or assigning it and that it was done in accordance with the existing laws.
"The accusation is that Rahul Gandhi and Sonia Gandhi usurped the property of AJL through Young India. This is legally wrong as the Young India is a section 25 company and it is only shareholder. If Young India becomes a shareholder in AJL then it does not mean that it owns the property of AJL. Any income of AJL remains with AJL and does not come to Young India," he said.
Sibal dismissed the allegations that the real estate of the AJL was worth Rs. 2000 crores as most of the AJL's properties were on land taken on lease from the government.
"The second allegation is that the real estate of the AJL is worth Rs. 2000 crores, but the net worth of the company itself is negative. All the property of AJL, but for the one in Lucknow, was leased from the government so it cannot be sold," he said.
"So even if AJL is liquidated, the assets will not go to the shareholders of a section 25 company, it won't go to Rahul ji or Sonia ji. If young India gets liquidated then it will go to a section 25 company," he added.
He also said that no one has been cheated in the transactions between AJL and YIL as all decisions were taken after approval from the shareholders.
"So, we are asking that who has been cheated in all this? The transactions between AJL and Young India was approved in an extraordinary board meeting of the company's shareholders. Shareholders do not have a problem. The case is that we have cheated, but nobody knows who has been cheated. There is also no breach of trust. There is no commercial transaction as there is no profit motive," he said.