Cover Story
BJP : Party For the Corporates, By the Corporates and of the Corporates
by Sanjay Sharma

In 1969 Indira Gandhi had abolished the provision of corporate funding by amending the Companies Act . Bearing populist overtones, this decision was viewed more as an attempt to damage the financial prospects of opponent parties. But the corporates' influence over Indian politics continued as ever with the black money and under the table donations. This amendment was reverted in 1985 during the tenure of Rajiv Gandhi. The maximum corporate contribution was still limited to 5% of annual net profits which remained so till 2013 when this limit was raised to 7.5%.

The BJP government not only removed the 7.5% cap on corporate donations to political parties, it also amended FCRA to allow foreign companies registered in India to make donations. The latter provision made before the 2019 Lok Sabha polls facilitated companies like Vedanta Limited to make donations in India and we know this company made donations more than Rs. 400 crores through electoral bonds.

BJP did not show even a pretence of maintaining transparency in funding which is an essential aspect of democracy. The introduction of Electoral Bonds came via a finance bill in 2017 undermining Reserve Bank of India's serious objections which had opposed the move to bring EBs saying this will not only override the RBI's sole authority for issuing bearer bonds, will also not achieve the intended purpose of transparency and be in violation of the principles and the spirit of the Prevention of Money Laundering Act (PMLA) 2002.

It is ironic that the government makes KYC verification in banks and for all government schemes mandatory to common citizens, when corporate donations with hidden identity were allowed by the BJP in the name of cleansing "the system of political funding in India”. 

The corpus of corporations in political funding has risen steeply in previous two decades indicating increased hold of the private sector in policy making. With the introduction of EBs, the proportion of corporate money rose to the levels India had never imagined. The funding pattern suggests that the BJP has also made this a tool for extortion and blackmailing. In sync with the use of agencies like ED and CBI the ruling party has amassed a lot of money. The annual accounts of this party with a closing balance of Rs. 1,071 crores in financial year 2013-14 have inflated five times with a closing balance of 5,680 crores after spending lavishly in the last ten years.

In 2022-23, BJP received Rs. 1294 crores through EBs and another Rs. 568 crores from 'Companies & Organisations' where just one organisation Prudent Electoral Trust alone contributed Rs. 256 crores. BJP's total contribution received this year was Rs. 2,120 crores. The ratio of Electoral Bonds (55%) and other corporate funding (24%) in this amount was almost 80%, just like the preceding year 2021-22 when total accumulated funding was Rs. 1,775 crores.

Besides, companies directly and through electoral trusts also contributed huge amounts during this period. The Prudent Electoral Trust 'donated' more than 1,000 crores in this period to the BJP. This trust received funds from companies like Serum Institute (Rs. 95 crores), Megha Engineering & Infra (Rs. 97 crores), ArcelorMittal Nippon Steel Ltd. (Rs. 200 crores) and Future Gaming & Hotel Services (Rs. 100 Crores).

Airtel, DCM Shriram, DLF, Essel Mining, GMR, Hero MotoCorp, real estate company Navayuga, Torrent Power and Western UP Power Transmission Co have also made big donations to parties, BJP being major beneficiary, during last years through electoral trusts. Out of five major such Trusts nearly 90% donations were made to BJP. 

In its annual contributions report for financial year 2022-23 submitted to the Election Commission with names of donors above rupees 20,000, mostly are companies who have given bigger amounts to this party. Individual donors' share is negligible as compared to corporate donors. Out of 719.85 crores contributed by 7946 donors, 70 percent came from only 2% donors (139 corporate and institutional each donating one crore or more).

Since introduction of Electoral Bonds out of total Rs. 16,492 crores worth of redeemed bonds, the BJP had a lion’s share with Rs. 8252 crores. This is more than the total contributions received by all other parties through bonds.  In the previous 6 years the ruling party has collected Rs. 12,930 crores through Bonds, Electoral Trusts and other means.

Reliance Industries' Bond Connections

Qwik Supply Chain Private Limited, a firm having links with Reliance Industries, is the fourth largest purchaser of EBs with Rs. 410 crores. One of its directors is also a board member in at least five other Reliance companies and head of accounts in Reliance Industries Limited. This firm donated Rs. 375 crores to BJP, remaining 35 crores went to Shiv Sena and NCP. 

Many firms with no direct official connections with the RIL but having common directors also on the board of RIL or in some other capacity connected to it have given EBs worth hundreds of crores to the BJP. An old business associate of Mukesh Ambani, Surendra Lunia is a board member of NexG Devices Private Limited and Infotel Business Solutions. Kamal Kumar Sharma is an associate of Lunia and is a director in Infotel Technologies Private Limited and Infotel Access Enterprises. The director of Honeywell and Chander Commercials Satyanarayanamurthy Veera Venkata Korlep is also a director on few Reliance firms. MN Media Ventures directors Sandeep Jairath and Kulwinder Pal Singh are connected to Lunia's group. Laxmidas Vallabhdas Merchant is director at several Reliance group firms. KR Raja is also a director in Reliance firms, both of them donated Rs. 25 crores each are among top 100 donors.

MK Jalan’s Keventer group, Aditya Birla group and BhartiAirtel are other big donors  for the BJP with contributions worth Rs. 352 crores, Rs. 285 crores and Rs. 236 crores respectively.

The government not only made electoral funding completely non-transparent, it also manipulated electoral bonds Rules at convenience. It reinterpreted Rules before the 2018 Karnataka Assembly elections to redeem expired bonds ought to be deposited in the National Relief Fund, and in 2022 a special window was opened in the month of December for purchase of Bonds before the Gujarat Assembly elections.

Introduction of EBs violated the constitution by depriving citizens of their fundamental right to know the source of political funding, by hiding identities of donors BJP obstructed voters from making informed decisions. The Supreme Court was also concerned that these Bonds would open doors for corruption and distort the democratic process of institutional decision making. Moreover, anonymised bearer bonds could be used by any foreign entity endangering our sovereignty. Similar apprehensions were raised by the RBI before the introduction of electoral bonds.

BJP brazenly disregarded the notion of transparency and accountability in governance at a time when corporate influence over political decision making is highest in the neo-liberal framework. History tells us that corporate houses have always donated funds to political parties as a measure of lobbying or for bribing to manipulate policies that serve their vested interests to make more profits. There is no philanthropy in corporate funding.

The BJP has gone many steps farther with the use of central agencies like ED, CBI, IT and GST Departments whose raids on many business houses were followed by hundreds of crores of rupees worth of EBs deposited in BJP accounts. This is the highest political corruption in the country's history and biggest extortion scam too.

The Modus  Operandi:
1. Corporates donate to parties, mainly the party in power, and policies are amended in their favour
2. Party in power institutes raids through governmental agencies and concerned corporate entity makes huge donations
3. The Corporate entities make donations and the ruling party withdraws/halts ongoing inquiries/investigations/cases of violations of law.

Did EBs Bought Favours to Companies?

The lists of donors and purchasers are now in public domain thanks to Supreme Court judgement. Three news organisations Newslaundry, Scroll and The News Minute along with a group of independent journalists collectively investigated under Project Electoral Bonds into the pattern of donations made through EBs by 21 companies.  They found a distinct pattern of raids by CBI, ED, IT department etc preceding the dates of purchase of Bonds. This raises doubts whether the contributions are voluntary. Top two donors, Future Gaming and Hotel Services and Megha Engineering and Infrastructure Ltd purchased bonds worth Rs. 1368 crores and Rs. 966 crores. Former was under investigation for money laundering charges and the latter for gross irregularities in mega construction projects.

Megha group’s Megha Engineering and Western UP Power Transmission gave 664 crores to the BJP. This group is not only the second biggest purchaser of Bonds but also biggest donor for BJP and second biggest for the Congress party. BJP received 56% of its total donations.

Future Gaming’s owner Martin Santiago has been under scanner for nearly two decades. His lottery business runs in many states, also in Bhutan and Nepal. He was accused of running an illegal lottery racket in Karnataka in 2007, then again in 2011 CBI registered 30 cases against him. It is believed he has powerful connections across political parties in various states and his business continued to flourish in spite of alleged irregularities. He is under investigation for money laundering since 2019 and in April 2022 his company’s assets were attached by the ED. In April, July and September in 2022 Future Gaming premises were raided by ED and in April, July and October this company bought EBs amounting to Rs. 280 crores. The properties of Martin and his son in law were raided again in April and May 2023 followed by purchase of EBs in April and July worth 213 crores in three instalments. The attached assets were freed in May 2023.

On 2 April 2023 Martin’s son Jose Charles Martin, who is Managing Director of Martin Group of Companies along with a delegation of All India Federation of Lottery Trade & Allied Industries and Rowing Federation of India met with the Union Finance Minister N Sitharaman  to discuss ‘on unlocking lottery industry potential to generate five crore jobs and a potential for INR 1.3 lakh crore annual GST revenues’ 

Future Gaming made donations six times its profits in Electoral Bonds, this company is also one of the major donors for the DMK in Tamil Nadu.

Megha Engineering and Infrastructure Limited (MEIL), second highest purchaser of EBs, accused of gross irregularities and corruption amounting to thousands of crores of rupees in construction of Kaleshwaram Lift Irrigation project (KLIS) in Telangana. The Comptroller and Auditor General’s performance audit report shows payments made in excess by at least Rs. 7500 crores to this company. The controversial project is ridden with corruption  to the extent that original outlay of 80000 crores is now expected to rise up to Rs. 1.5 lakh crores. Income Tax officials raided its premises in October 2019, the company bought Bonds worth 5 crores in the same month. This company continued buying EBs till November 2023 totalling to Rs. 980 crores.

Vedanta Limited is the fifth largest buyer of EBs worth Rs. 400 crores has acquired concessions in environmental laws oil drilling project in Rajasthan. Company was under the scanner of CBI in 2020 and ED in 2022.

Hetero Pharma group faced a raid in October 2021 by the IT department which seized Rs. 142 crores in cash. This Group and its subsidiaries bought EBs. The chairman of this one of the biggest health sector conglomerates in the country, Dr B Pardhasaradhi was elected to Rajya Sabha on BRS ticket in May 2022. He is the richest MP in Rajya Sabha.  As reported by the Scroll most of the bonds were bought around the date of his RS nomination.

DLF Group’s case is interesting as it stopped buying EBs after an ED raid in November 2023. The bonds worth 170 crores were bought by this company between October 2019 and November 2022. Aditya Birla Groups had donated Rs. 534 crores through its group companies and was successful in sanctioning strict quality control measures in import of viscose fibre. This decision restored Grasim Industries, a Birla subsidiary, monopoly in the market over small and medium producers who rely on import of cheaper fibre from China and Indonesia. 

CPIML had demanded from Dhami government in Uttarakhand to lodge a criminal case against the Navayuga Engineering Company and an investigation into the irregularities and corruption by this company in 2023 after the Sylkyara-Barkot tunnel collapse in Uttarakhand when lives of 41 miners were at stake for 17 days. This company had purchased EBs worth Rs. 55 crores which were given to BJP between 2019 and 2022.  Navayuga’s Hyderabad based offices were raided by the Registrar of Companies and IT department in 2018 for tax violations and money laundering allegations. This is a travesty that Navayuga company continues to enjoy the fruits of cronyism, while the leader of rescue miners who saved lives of 41 workers in Sylkyara, Wakeel Hasan, has to bear the brunt of Modi's Bulldozer-raj. He is rendered homeless, his home at Khajuri in East Delhi was demolished by the government.

The Dhami government took no action against Navayuga for violating standards or for endangering the lives of workers. An investigation panel later found that proper safety arrangements were not made during the construction of the tunnel. This tunnel is part of Modi’s much hyped Char Dham All Weather Project which is causing immense devastation to the environment and social life in Uttarakhand hills. Navayuga was also awarded the Rishikesh-Karnprayag rail link project in Uttarakhand. Another big project by this company in Assam, a bridge on Brahmaputra river was inaugurated by Narendra Modi in 2017. This same company was also responsible for the death of twenty labourers in August last year in an accident in Nagpur-Mumbai Samridhi expressway and a case of culpable homicide has been registered against the company.

Delhi CM Arvind Kejriwal was arrested in the liquor scam case filed by the Enforcement Directorate on 21 March. One of the accused in this case is a director in Aurobindo Pharma P Sarath Chandra Reddy who was taken into custody on 10 November 2022. He contributed Rs. 5 crores to BJP just five days after his arrest. In June 2023 he turned approver in this case and in November same year Aurobindo Pharma (and related firms) gave another 50 crores in EBs to BJP.   (See Page 12 for the article on Pharma companies and the EBs )

Rest of the companies in this list of twenty one companies seem to earn favour with respect to irregularities in their conduct or to seek concessions in environmental clearing or some other type.

Another interesting case that correlates corruption allegations and Electoral Bonds is one on Robert Vadra of alleged fraud in a land deal that was filed in Gurugram in 2018. DLF group was alleged to be involved in this. In April 2023 Haryana government told the high court that it has not found any violation in this case. Between October 2029 and November 2022 DLF group had contributed Bonds worth Rs. 170 crores to the BJP.

Santiago Martin’s Future group was the highest contributor with Rs. 542 crores for the All India Trinamool Congress which received a total of Rs. 1609 crores in EBs. Sanjiv Goenka group has donated Rs. 403 crores and Keventers group gave Rs. 47 crores to AITC. Both these groups have major business interests in West Bengal.  

The Kaventer group, faced investigation by ED for undervaluing shares in divestment in Metro Dairy, donated to BJP Rs. 320 crores. 

Bharat Rashtra Samithi in Telangana received Rs. 1214 crores total through Bonds. Megha Engineering again was the biggest donor for this party with Rs. 195 crore.

For Odisha’s ruling party Biju Janata Dal, Essel Mining (174 crores), Jindal Steel & Power (100 crore) and Aditya Birla’s Utkal Alumina (70 crore) were major contributors. These groups have big industrial projects in Odisha. BJD’s total contribution was Rs. 775 crores.

Influencing Policy Energy Sector

Electoral Bonds worth Rs. 3600 crores were purchased by companies in the Energy sector, biggest among them being the second highest donor MEIL and its subsidiaries with Rs. 1200 crores.  Almost all major players in this sector donated to political parties. Many ongoing projects in the energy sector affect a large number of populations facing displacements. We are aware that effective political push plays a role in acquiring environmental, forest and land clearances in such projects.
The National Green Tribunal questioned Sun Pharma in 2022 for environmental clearance by the ministry for its TN expansion plant in Kanchipuram, this company had donated 31.5 crores in 2019-20.
Vedanta groups, a multinational mining conglomerate, gave Rs. 230 crores to BJP. This group’s Cairn Oil is responsible for polluting water sources making them unsuitable for use in Barmer district of Rajasthan. The company has not provided any alternate arrangement for water to the locals as was directed by the administration. Vedanta companies are responsible for polluting the environment in other places including Jharsuguda and Kalahandi in Odisha. This has not failed in acquiring clearances from the ministry of Environment or clean chits from the NGT despite local peoples’ protests and objections.  Vedanta donated Rs. 125 crores to Congress.
Much before Electoral Bonds, Vedanta a foreign company, had illegally contributed to BJP and Congress violating FCRA for which both these parties were indicted by Delhi High Court in 2014. The Modi government amended the Foreign Contribution Regulation Act in 2016 with retrospective effect to change the definition of ‘foreign’ company, and made illegal donations legal in one go.
Dubious Deals ?
The BJP government in 2017 had done away with the earlier corporate donation cap of 7.5% of net profit. 200 top donor companies contributed a total of Rs. 8,700 crores to political parties, which in case of earlier 7.5% cap would have been only Rs. 21 lakhs for that year.
The Reporters' Collective analysed , out of 200, 16 loss making firms who donated to parties in EBs worth Rs. 710 crores, major share went to BJP with Rs. 460 crores. Bharti Airtel incurred an average loss of Rs. 9,716 crore during 2020-21 to 2022-23, but the company made donations worth Rs 197.6 crore (Rs 197 crore to BJP, Rs 50 lakh to National Conference, Rs 10 lakh to RJD). DLF too incurred losses in the financial year 2019-20 even then it made donations.
Apart from this, 31 firms made political donations exceeding their profits. A liquor distribution company made an average profits of Rs. 6 lakhs in three years, but donated to BJP Rs. 6.8 crore and to RJD Rs. 70 lakhs. Santiago Martin's Future Gaming contributed 16 times more than its average three year profits. Reliance linked Qwik Supply Chain Pvt Ltd donated 15 times more than its profit. A Keventer group's company, Madanlal Ltd, gave 56 times more money to parties than its average three year profits.
Party For the Corporates By the Corporates