BJP as biggest beneficiary of electoral bonds outlawed by Supreme Court gives credence to Congress’s charge of extortion

Photo Courtesy The Times of India.

By Our Correspondent

NEW DELHI – The Bharatiya Janata Party, ruling the country for the last 10 years, has emerged as the biggest beneficiary of the dubious electoral bonds since they were introduced in 2018 by receiving the maximum funds amounting to a whopping Rs.6,986.50 crore through the questionable scheme. The Supreme Court has dealt a severe blow to the BJP by invalidating the electoral bonds scheme in its landmark judgment delivered on February 15.

The details furnished by the State Bank of India (SBI) in compliance with the Supreme Court’s direction have revealed how the corporate houses and individuals benefited from their donations to ruling parties at the Centre and in the states. The contributions were also made in response to threats of investigation and prosecution in false and concocted cases launched by the Central agencies such as Enforcement Directorate (ED) and Income Tax Department.

One of the common links in the list of electoral bond purchasers is that a significant number of companies among the top donors were under the ED’s or the Income Tax Department’s scanner at some point of time in the past five years. In some cases, a chunk of the bonds were bought by these firms, in the days following such searches.

The Future Gaming and Hotel Services Private Limited was the largest donor to political parties via the electoral bond route, with a cumulative sum of Rs. 1,368 crore. In May 2023, the ED had carried out searches at the residence of Santiago Martin in Chennai, the well-known lottery magnate and the Managing Director of the company. The ED had also conducted searches at the business premises of the company in Coimbatore under the provisions of the Prevention of Money Laundering Act.

In terms of the amount of donation received through electoral bonds, the BJP was followed by West Bengal’s ruling party Trinamool Congress (Rs. 1,397 crore), Congress (Rs. 1,334 crore) and Bharat Rashtra Samiti (Rs. 1,322 crore). Odisha’s ruling party Biju Janata Dal was the fourth largest recipient at Rs. 944.5 crore followed by Dravida Munnetra Kazhagam at Rs. 656.5 crore and Andhra Pradesh’s ruling party YSR Congress redeemed bonds worth nearly Rs. 442.8 crore.

The Janata Dal (Secular) received bonds worth Rs. 89.75 crore, including Rs. 50 crore from Megha Engineering, the second largest purchaser of electoral bonds. The major donors of DMK included Future Gaming, Megha Engineering, India Cements and Sun TV. The DMK was among the few political parties to disclose the identity of the donors, while major parties such as the BJP, Congress, TMC and Aam Aadmi Party did not disclose these details to the Election Commission of India (ECI), which has now made public these details as per the Supreme Court’s order.

The Telugu Desam Party redeemed bonds worth Rs. 181.35 crore, Shiv Sena Rs. 60.4 crore, and Rashtriya Janta Dal Rs. 56 crore. Samajwadi Party got Rs. 14.05 crore via electoral bonds, Akali Dal Rs. 7.26 crore, AIADMK Rs. 6.05 crore and National Conference Rs 50 lakh. The CPI(M) has declared that it will not receive funds through electoral bonds, while filings made by the AIMIM and Bahujan Samaj Party showed nil receipts.

A five-judge Constitution Bench of the Supreme Court had on February 15 unanimously struck down the Centre’s electoral bond scheme which facilitated anonymous political donations for being unconstitutional. The court held that the scheme by permitting anonymous political donations infringed upon the fundamental right to information under Article 19(1)(a) of the Constitution.

The court highlighted that economic inequality leads to differing levels of political engagement because of the deep association between money and politics. As a result, there is a legitimate possibility that financial contribution to a political party would lead to quid pro quo arrangements.

On the government’s argument that the scheme curbs black money and its circulation, the court said that it does not justify the encroachment into fundamental rights. It underscored that the government did not adopt the least restrictive method to achieve its objective. As examples of such least restrictive methods, the Chief Justice cited the Rs. 20,000 cap on anonymous donations and the concept of Electoral Trusts which facilitate the collection of political contributions from donors. 

The court found that the amendment made to Section 182 of the Companies Act, 2013, permitting unlimited political contributions by companies, to be manifestly arbitrary. The provision allows Indian companies to make financial contributions to political parties under specific conditions. However, through the Finance Act, 2017, crucial changes were introduced including the removal of the prior cap on the amount that companies can donate to political parties.

The SBI was ordered to immediately stop the issuance of any further electoral bonds and furnish details of such bonds purchased by political parties since April 12, 2019, to the ECI by March 6. Such details must include the date of purchase of each bond, the name of the purchaser of the bond and the denomination of the bond purchased. The ECI was directed to subsequently publish all such information shared by the SBI on its official website by March 13.

The Supreme Court later refused to give any further time to the SBI to furnish the details of electoral bonds, foiling its attempt to seek postponement of the disclosure until after the general election. The court also questioned the bank’s silence on what had been done to comply with the order until the filing of an application for extension of time, just two days before the March 6 deadline. Even manually matching the two datasets could not have taken as long as the four months the SBI wanted.

In a ferocious attack on Prime Minister Narendra Modi over the electoral bonds scheme, Congress leader Rahul Gandhi has accused Modi of running the world’s largest extortion racket. He alleged that the funds amassed through the now scrapped scheme were used to split political parties like the Shiv Sena and the Nationalist Congress Party in Maharashtra, and to topple Opposition governments.

Congress president Mallikarjun Kharge has also demanded a Supreme Court-monitored inquiry, while the party’s communications chief Jairam Ramesh alleged that companies which donated to the BJP were granted government contracts in a quid pro quo arrangement. Rahul Gandhi said that the opaque electoral bonds system was designed to benefit the ruling party.

“Now it turns out that this is a way of extorting money from India’s largest corporates. A way of stealing money from the biggest contracts in the country, and intimidating corporates and forcing them to give money to the BJP. Electoral bonds is the world’s biggest corruption scam and extortion racket run by the Prime Minister of India,” Rahul Gandhi said at a press conference during his Bharat Jodo Nyay Yatra.

Terming it criminal extortion from corporate India, the Congress leader said that he was not making allegations, but stating facts. “Months after a contract is given or days after the CBI or ED raids take place, the companies suddenly start giving electoral bonds to the BJP. Certain companies which never donated money to the BJP, have got cases filed by the ED, CBI, and then the corporates donate money to the party. It’s up front,” he said.

CPI(M) general secretary Sitaram Yechury also said that the correlation between the raids by the CBI and ED has been clearly established with the available data on electoral bonds. “It is very clear that once they buy the electoral bonds, the investigations against them by the Central agencies are suspended. This is nothing but a clear-cut case of political extortion,” he said.

However, large recipients of funding via electoral bonds, including the BJP, the Congress, and the Trinamool Congress have not shared any details about their donors, in submissions made to the ECI under the direction of the Supreme Court in May 2019 and November 2023. This came to light on March 17 when the ECI published the data previously submitted to it by political parties in sealed covers under the top court’s directions. Only a handful of parties have revealed their electoral bond donors’ identities in their entirety. These parties include the DMK, AIADMK and JD(S).

The companies from the infrastructure sector were the largest buyers of electoral bonds worth Rs. 50 crore and above, as per the lists submitted by the SBI to the ECI. The biggest donors in the infrastructure and construction space accounted for Rs. 2,272 crore by 12 companies. These included Megha Engineering (Rs. 966 crore, the second largest donor overall), DLF Group (Rs. 170 crore), Rashmi Cement (Rs. 63.5 crore) and NCC Ltd. (Rs. 60 crore), among others.

The power and mining sector contributed the second biggest chunk of bond purchases over Rs. 50 crore, with purchases from Haldia Energy (Rs. 395 crore), Western UP Power Transco (Rs. 220 crore), Dhariwal Infra and Torrent Power Ltd. From the mining space, Vedanta Ltd. and Essel Mining bought bonds worth a combined Rs 624 crore.

Among the individual donors, there are some well-known titans of the corporate world as well. Lakshmi Niwas Mittal, Executive Chairman of ArcelorMittal, bought bonds worth Rs. 35 crore, InterGlobe promoter Rahul Bhatia procured bonds worth Rs 20. crore, Biocon founder Kiran Mazumdar Shaw made purchases worth Rs. 6 crore, while Polycab Chairman Inder Thakurdas Jaisinghani bought bonds worth Rs. 14 crore.


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