The PMLA Adjudicating Authority on Wednesday paved the way for the Enforcement Directorate to take possession of about Rs 752-crore worth of assets of Congress party-promoted National Herald newspaper as it upheld a freezing order issued for these properties last year.
The authority said in its order that it believes that the movable assets and equity shares that were attached by the ED are proceeds of crime and linked to the offence of money laundering.
The agency can now take possession of these assets like the Herald House at ITO in Delhi, land and building in Mumbai, Lucknow and some other locations.
The final confiscation of these assets can be done once the trial court rules in favour of the prosecution (ED).
The central agency had attached these properties in November last year by issuing a provisional attachment order under the Prevention of Money Laundering Act against Associated Journals Ltd and Young Indian.
The National Herald is published by AJL and owned by Young Indian Private Limited.
Congress leaders Sonia Gandhi and Rahul Gandhi are majority shareholders of Young Indian with 38 percent shares held by each one of them.
The Congress had then called the agency action "petty vendetta tactics" and dubbed the ED a "coalition partner" of the BJP.
The agency had alleged in a statement that in this case the shareholders and donors of the Congress were "cheated" by the office-bearers of AJL and the party.
In the statement, the ED had said it had issued an order to provisionally attach properties worth Rs 751.9 crore.
"Investigation revealed that Associated Journals Ltd is in possession of proceeds of crime in the form of immovable properties spread across many cities of India such as Delhi, Mumbai and Lucknow to the tune of Rs. 661.69 crore and Young Indian is in possession of proceeds of crime to the tune of Rs. 90.21 crore in the form of investment in equity shares of AJL," it said.
The Gandhis, Congress president Mallikarjun Kharge and party leaders Pawan Bansal, D K Shivakumar (Karnataka deputy chief minister) and his MP-brother DK Suresh were questioned and their statements were recorded by the agency in connection with the case.
The money laundering case stems from a court order -- Metropolitan Magistrate of Delhi -- that took cognisance of a private complaint against alleged irregularities in the National Herald's affairs on June 26, 2014.
The court had held that seven accused persons and entities, including Young Indian, "prima facie" committed offences of criminal breach of trust under various sections of the IPC, including cheating and dishonestly inducing delivery of property, dishonest misappropriation of property and criminal conspiracy, the ED said.
"The accused persons hatched a criminal conspiracy to acquire properties worth hundreds of crores of AJL through a special purpose vehicle-- Young Indian. AJL was given land on concessional rates in various cities of India for the purpose of publishing newspapers," the agency said.
It added that AJL closed its publishing operations in 2008 and started "using" the properties for commercial purposes, it alleged.
It said the AJL had to repay a loan of Rs 90.21 crore to the All India Congress Committee, however, the AICC treated the said loan of Rs 90.21 crore as non-recoverable from AJL and sold it for Rs 50 lakh to a newly incorporated company Young Indian "without" any source of income to pay even Rs 50 lakh.
"By their action, the shareholders of AJL as well as donors of Congress Party were cheated by the office bearers of AJL and Congress Party," the agency claimed.
After purchasing the loan of Rs 90.21 crore from AICC, Young Indian demanded either re-payment of loan or allotment of equity shares of AJL to it, the ED said.
AJL, it added, held an Extraordinary General Meeting and passed a resolution to increase share capital and issue fresh shares worth Rs 90.21 crore to YI.
"With this fresh allotment of shares, shareholding of more than 1,000 shareholders was reduced to a mere 1 percent and AJL became a subsidiary company of YI. YI also took control over properties of AJL," the agency said.
