Cong admits to giving loan to help revive defunct paper

The BJP's Arun Jaitley on Friday asked the Congress for a straight answer on whether it had given a Rs 90 crore unsecured loan to Associated Journals Private Limited, which owned the now-defunct National Herald newspaper, instead of alleging that the charges made by Subramanian Swamy were "baseless" and "untrue".

For, Jaitley said, if Swamy's allegations were true, they amounted to the "gravest violation (by the Congress) of income-tax exemptions to political parties, and also electoral laws".

Late in the evening, after attacking Swamy all day but refusing to engage with specifics, the Congress conceded that the loan was indeed given.

A release issued by Congress general secretary Janardan Dwivedi said the party has done its duty by supporting Associated Journals to help initiate the process to nurse National Herald back to health.

"This support was extended by the Indian National Congress in the form of interest-free loans from which no commercial profit has accrued to INC," the release said.

Earlier in Shimla, Jaitley said political parties and donors were exempt from income-tax, subject to the condition that the donations were used only for political purposes, not business or commercial operations. However, the board of directors of Associated Journals had passed a resolution on Feburary 26, 2011, saying the AICC had given a loan of Rs 90 crore to the company floated by Sonia and Rahul Gandhi, which had acquired Associated Journals.

"Transfer of money like this by any political party to a company is in violation of the exemptions and electoral law," Jaitley said. "The Congress must tell whether this loan was actually given or not... Instead of using adjectives like 'baseless' and 'untrue' it should give a specific reply to the public as the whole issue is about gross impropriety and illegality," he said.

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