National Herald Case Amid Legal, Ethics & Political Legacy Issues
parliamentary party chairperson Sonia Gandhi and her son Rahul Gandhi (Image credit Social media)
The National Herald Controversy: Legal Maneuvers, Ethical Dilemmas, and the Politics of Legacy
By Sesh Kumar Pulipaka
New Delhi, April 18, 2025: The National Herald case has come to epitomize the fraught intersection of law, politics, and ethics in Indian public life.
At the heart of the controversy is the allegation that the Indian National Congress, through a series of calculated moves, allowed the historic newspaper — once the voice of India’s freedom struggle — to decline into financial ruin, only to later transfer control of its parent company, Associated Journals Limited (AJL), to a closely held private entity, Young Indian, for a token amount.
Critics argue that this was not a matter of financial misfortune but a case of deliberate neglect. Rather than reviving The National Herald through fresh capital infusion or restructuring AJL transparently, the Congress allegedly stood by as losses mounted.
Once AJL became insolvent, Young Indian — set up with a paid-up capital of just ₹5 lakh and controlled by senior Congress leaders — acquired the rights to recover Congress’s ₹90 crore loan to AJL in exchange for a mere ₹50 lakh. This allowed Young Indian to take over AJL and gain de facto control of real estate assets worth hundreds of crores, including prime properties in Delhi, Mumbai, and Lucknow, without any competitive or public process.
The legality of the transactions may not be in doubt per se. But the ethical dimensions are deeply troubling.
Questions of fiduciary responsibility, transparency, and political stewardship dominate the discourse. Was this a clever financial workaround within the bounds of law, or was it a betrayal of the public trust and a symbolic institution’s legacy?
Congress’s defence rests on three planks. First, it attributes AJL’s financial woes to structural shifts in the media industry, with the rise of private news corporations and the decline of political party-affiliated publications.
Second, it argues that the ₹90 crore loan was part of a sustained attempt to keep AJL alive and that creating Young Indian was a nonprofit solution designed to preserve, not plunder, the institution.
Third, the party emphasizes that Young Indian is a Section 25 (now Section 8) not-for-profit company, and hence, cannot distribute profits to its stakeholders — negating any commercial intent. Also, it argues that the title to property has not changed, nor could it be sold.
Furthermore, the Congress points to the resumption of The National Herald in digital form in 2016 as evidence of its commitment to legacy revival. But critics argue that this defence glosses over more transparent alternatives that could have been pursued.
For example, the Congress could have infused equity into AJL publicly, sought public contributions, or allowed AJL to explore bank financing. Instead, the process was closed and controlled, raising questions about the true intent.
The optics of the transaction have been damaging with senior party leaders involved in a private entity gaining control over legacy assets through a circuitous financial route; an insolvent institution with prized real estate being handed over for a fraction of its worth; and the opacity surrounding the deal — all have fed public skepticism.
Legal proceedings have done little to clear the air. The accused have approached the Delhi High Court and Supreme Court multiple times to quash investigations and income tax reassessments, but the judiciary has consistently declined to intervene. Courts have maintained that the allegations, including misappropriation and potential money laundering, deserve to be examined at trial.
As a result, all attempts to stall the investigation have failed, and the case remains very much alive. The latest in the story is the ED filing the chargesheet in the investigation and FIR.
The Supreme Court of India has however, recently, expressed significant concern over the ED’s low conviction rate in money laundering cases under the Prevention of Money Laundering Act (PMLA). During an unrelated hearing in August 2024, a bench comprising Justices Surya Kant, Dipankar Datta, and Ujjal Bhuyan highlighted that out of approximately 5,000 cases registered by the ED over the past decade, only 40 have resulted in convictions.
This underlines the stern test of the quality of investigations expected in the matter of National Herald-Young Indian.
The National Herald case is less about violations of corporate law and more about the erosion of moral capital. While the Congress Party may claim legal compliance, it faces enduring questions about its ethical conduct.
In a country where institutions like The National Herald are seen as part of the national heritage, the notion that it was allowed to decay only to be repurposed under opaque circumstances has created lasting damage to the party’s moral authority.
Whether or not the courts ultimately find wrongdoing, the case appears to have cast a long shadow over political credibility and the responsibilities of institutional legacy.
(This is an opinion piece; views expressed belong to the author)
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