ED Takes Stringent Measures in Money-Laundering Probe, Freezes Assets Worth Rs. 751.9 Crore

The Directorate of Enforcement (ED) has executed a significant move by issuing a provisional order to provisionally attach properties valued at a staggering Rs. 751.9 Crore in a high-profile money-laundering case investigated under the Prevention of Money Laundering Act (PMLA), 2002.

An exhaustive investigation conducted by the ED has revealed that M/s. Associated Journals Ltd. (AJL) holds alleged proceeds of crime in the form of immovable properties across key cities in India, including Delhi, Mumbai, and Lucknow, amounting to a colossal Rs. 661.69 Crore. Simultaneously, M/s. Young Indian (YI) is implicated in possessing proceeds of crime to the tune of Rs. 90.21 Crore through an investment in equity shares of AJL.

The genesis of the money-laundering investigation can be traced back to a process initiated by the Hon’ble Court of Metropolitan Magistrate of Delhi. The court, responding to a private complaint dated 26.06.2014, held that seven accused persons, including M/s Young India, prima facie committed offenses of criminal breach of trust, cheating, dishonestly inducing delivery of property, dishonest misappropriation of property, and criminal conspiracy under various sections of the Indian Penal Code (IPC).

The court’s findings suggest a meticulously orchestrated criminal conspiracy by the accused persons to acquire properties worth hundreds of crores owned by AJL through a special purpose vehicle, M/s Young Indian. Initially allotted land at concessional rates in various cities for newspaper publishing, AJL purportedly diverted these properties for commercial purposes after closing its publishing operations in 2008.

AJL, entangled in financial complexities, found itself obligated to repay a loan of Rs. 90.21 Crore to the All India Congress Committee (AICC). Astonishingly, AICC deemed the said loan as non-recoverable from AJL and subsequently sold it for a mere Rs. 50 lakh to the newly incorporated company, M/s Young Indian, which lacked a visible source of income to even cover this nominal amount. This strategic move, as alleged by the ED, amounted to cheating the shareholders of AJL and donors to the Congress Party, orchestrated by the office bearers of AJL and the Congress Party.

The ED’s investigation further exposed that after acquiring the loan of Rs. 90.21 Crore from AICC, Young Indian demanded either repayment or allotment of equity shares of AJL. Subsequently, AJL held an Extraordinary General Meeting (EGM), passing a resolution to increase share capital and issue fresh shares worth Rs. 90.21 Crore to Young Indian. This maneuver drastically reduced the shareholding of over 1000 shareholders to a mere 1%, ultimately leading to AJL becoming a subsidiary company of Young Indian, which also assumed control over AJL’s properties.

As the investigation unfolds, additional layers of complexity and potential financial irregularities are expected to surface, prompting a thorough examination of the intricate financial transactions and the alleged fraudulent activities involving high-profile entities. The ED has confirmed that the investigation is still underway.