Swamy moves EC to derecognise Cong on Herald loan issue

Janata Party chief Subramanian Swamy moved the Election Commission to derecognise Congress, alleging the party violated laws by providing a Rs 90 crore loan to a company that published the now-defunct National Herald newspaper. The Congress on its part adopted a combative approach over the controversy on The Associated Journals issue, saying it has discharged its political dharma and that it was ready to contest any challenge in any fora for giving loan to support the newspaper. BJP hoped the EC will take cognisance of Swamy's plea and also refused to buy the Congress argument that the loan was paid to propagate its ideology, alleging the deal appears to have been done more for the real estate value involved and inadvertent money laundering. In a letter to Election Commission on Saturday, Swamy said Congress has "prima facie" committed an offence under electoral law as well as Income Tax law for which it is necessary to hold hearings and decide on derecognising the party. His petition to the Commission comes as a follow up to his charges against Congress President Sonia Gandhi and Rahul Gandhi over acquisition of Associated Journals that published the newspaper to which Congress gave a loan of over Rs 90 crore. He had said Associated Journals obtained an unsecured loan of over Rs 90 crore from AICC which he claimed was illegal under Income Tax Act because a political party cannot give loans for commercial purposes. “The written admission by senior Congress leader and spokesperson Janardhan Dwivedi in his press release dated November two admitted that Congress has loaned (a sum of more than Rs 90 crores) to a company incorporated under Section 3 of Companies Act, 1956 by name Associated Journals Pvt Ltd.” "This loan is in violation of the Guidelines and Rules that has to be mandatorily followed by political parties for registration as well as recognition. Section 29A to C of RPA and Section 13A of IT Act do not make any provision for any political party to extend loans to companies with or without interest," Swamy said in the letter. Swamy said the intention of Parliament by framing such provisions was to prohibit parties from giving loans. Rules and Guidelines also make it mandatory that no political party shall utilise its right to receive donations to extend loans to commercial ventures whether the loan is with or without interest and every party must use funds for its political activity only, he said. Swamy also cited cancellation of tax exemptions to BCCI, registered as a charitable institution, and imposing a severe fine for the offence of extending a loan to Indian Premier League (IPL). BJP leader Balbir Punj hoped that the Election Commission will take cognisance of Swamy's petition. The opposition party also maintained that name-dropping of Jawaharlal Nehru and Mahatma Gandhi cannot justify a wrongdoing. It also emphasised that political parties cannot lend money to commercial entities. No party can decide what will be our political work: Cong Adopting a combative approach over the controversy on The Associated Journals issue, the Congress has said it has discharged its political dharma and was ready to contest any challenge in any fora for giving loan to support National Herald. Party General Secretary Janardan Dwivedi also launched a hard-hitting attack on Janta Party chief Subramanian Swamy and the BJP for carrying out a propaganda of lie and distorting facts. Seeking to rebut the allegations point by point, Dwivedi told reporters, "How can there be a commercial purpose as alleged when no interest was charged for the loan?" Responding to BJP leader Arun Jaitley's contention that a political party can use its funds only for political purposes and not any business or financial activity, Dwivedi asserted, "Who will decide what political work for any party? “We will decide what is political work for us and not any other party. BJP will not be allowed to decide what is political work for us. For some parties spreading rumour and unrest is political work.” "To promote the Gandhi-Nehru thought is political work and to encourage the people, organisations and instruments working for the cause. We have discharged our political dharma because Associated Journals has worked to promote the Gandhi-Nehru thought." Holding that the revival of National Herald was an issue of great importance and sentiments for the Congress, he said, “National Herald was established by Jawaharlal Nehru to give strength to the freedom struggle. Nehru is not only the leader of a party but the whole nation.” Dwivedi also pointed out that the revival of National Herald has helped over 700 employees get their salary dues, Provident Fund and VRS benefits. "400 people working in the Associated Journals had become homeless while 300 workers in its Lucknow office had lost their jobs. We are proud that not only the salary dues of these 700 employees were paid off but even the VRS was given with all the benefits to those, who opted for it and their Provident Funds were also paid," he said wondering whether any other news organisation does all these for their employees. Noting that questions have also been raised over a new company Young Indian having Sonia Gandhi and Rahul Gandhi floated to take over the functioning of Associated Journals, Dwivedi said, “An impression is being sought to be given that Young India has taken over The Associated Journals and there will be a commercial venture now.” "The existence of Associated Journals has not come to an end. Young Indian has got the shares of it. Any organisation can keep its existence as long as it serves the purpose for which it exists. Associated Journals is being made functional. That's all." A senior party leader speaking on the condition of anonymity said that the party will fight out the issue in Election Commission. "Let Swamy go wherever he wants to go. We will contest it technically," the leader said when pointed out that Swamy has decided to approach Election Commission seeking derecognition of Congress. The press conference called on a non media briefing day on Saturday is the second intervention by Dwivedi within 24 hours on the issue. Breaking its silence over the allegations levelled by Swamy, Dwivedi said in a late Friday night press release that the support of Congress to National Herald newspaper was interest free loans yielding no commercial profit to the party. He also claimed that it was done in compliance with the law of the land.