Tuesday, December 22, 2015

Herald boomeranged on Modi

Pankaj Sharma
21 December 2015

If you befriend a habitual jumping jack, you are bound to suffer a thousand falls

It took less than an hour in the afternoon  last Saturday for Sonia Gandhi and Rahul Gandhi to change the entire perception that Bhartiya Janta Party (BJP) was trying to create for all these months in the  National Herald case. From walking into the court and six minutes of legal proceedings to addressing the media at the national headquarters of the Congress party, Sonia and Rahul could successfully smash the net which BJP has been preparing to trap them by prompting Subramanian Swamy. By gracefully honouring the court proceedings Sonia and Rahul played their cards well and BJP lost out the battle of public perception badly. Congress could turn the surface upside down and convince the country that BJP brought in politics in a legal issue and the case was filed with the intention to harass the Congress leadership unnecessarily. 

Forget BJP, there was no dearth of leaders even in the Congress who were of the opinion that National Herald case would weaken the political prospects of the party. They all must be in shock to find how Sonia and Rahul converted it into an opportunity to give strength to the Congress and prove that the sentiments of the nation are not with the tactics of Narendra Modi which he is applying for selective vendetta against his political opponents. The country will watch the Congress party fighting the legal battle on the one hand and a political battle on the other hand in the days to come till the truth is not vindicated. Heavily depending on the legal skills of Subramanian Swamy, Modi and BJP poorly failed in assessing the political potency behind this issue and must be finding trapped in their own game.

It is ridiculous to suggest that Swamy has no connection with the Prime Minister and BJP and whatever he has been doing in National Herald case was a result of only his brainwave. There are no buyers of the argument given by BJP that it was Sawmy’s personal call which has nothing to do with the party and he is free to go in a court of law against any person as a private citizen. What could be more obvious than a return gift of a big government bungalow to Swamy just a day before the date of summoning Sonia and Rahul by the court?  

Well-meaning legal experts are surprised at Swamy’s charge of cheating in National Herald case and have failed to understand that after all who has cheated whom? National Herald was a newspaper started by Pandit Jawaharlal Nehru and the leaders of the independence struggle in 1937 to give voice to the freedom movement in the country. In addition to Nehru, freedom fighters like Purshottam Das Tandon, Acharya Narendra Dev, and Rafi Ahmad Kidwai were among the first subscribers and signatories to the Memorandum of Association of The Associated Journals Limited (AJL)—the company that published National Herald and later Quami Awaaz and Navjeevan.

The AJL was in poor financial health from its early days. Nehru, on more than one occasion, had told that he will not let the National Herald close down even if he had to sell Anand Bhawan. Over the years, the company often did not have enough money to pay the salaries of its employees, or pay its taxes and other dues. Therefore, from time to time, whenever asked, the Congress Party would extend a loan to help AJL tide over its immediate financial crisis. The Congress Party and AJL were also inextricably linked to one another since the founding of AJL in 1937. 

The Memorandum of Association of AJL states in Object “(t)”: “The policy of any newspaper, periodical, magazine or journal issued by the Company shall generally be in accordance with the policy and principles of the Indian National Congress.” Therefore supporting AJL fulfilled the political object and purpose of the Congress Party.

Despite the editorial excellence of the paper the financial and business management of AJL continued to be poor. AJL continued to bleed financially and ran into losses year after year. Over approximately a decade, AJL received multiple loans adding up to Rs 90 crore from the Congress Party. A time came when AJL could not pay the salaries of its employees. In the financial year ending March 2008 it booked a loss of approximately Rs 6 crores. This was followed by more losses, approximately Rs 34 crore in 2008-09 and Rs 2 crore in 2009-10. No bank would sanction AJL a loan because of Rs 90 crore debt on its balance sheet. Finally, the financial burden could no longer be borne by the AJL itself or by its benefactor the Congress Party.

A Section 25 not-for-profit company, Young Indian was formed to execute the revival plan. Further, in order to bail out AJL and free it from the burden of its backbreaking debt burden of Rs. 90 crore. This loan was assigned to the not-for-profit company by the Congress Party. Thereafter, with the consent of AJL’s shareholders this debt could be extinguished by issuing new equity to Young Indian, the not-for-profit company. Conversion of debt into equity is a normal business practice to restore financial health of companies that are over-burdened with debt.

A resolution was approved unanimously by all the shareholders of AJL, present and voting in the EGM on 21st January 2011. The loan of 90 crores was removed from AJL’s books in perpetuity in February 2011.  As a result, for the first time in decades the net worth of AJL became positive and the company took its first steps on the path to recovery. AJL was able to declare its first profit in several years in 2011-12 and came out of the red, with the major shareholder now being Young Indian, a not-for-profit company, whose directors are not allowed to share any profits. National Herald case has clearly boomeranged on Modi and his BJP more than Subramanian Swamy. If you befriend a habitual jumping jack, you are bound to suffer a thousand falls. Sonia, Rahul and Congress have all the reasons to March towards their rosy days now and a Modi who refuses to learn the lessons even after the outcome of Bihar elections must realise that his best is over.

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