EB and Corporates


While running their businesses at a loss, these corporations managed to dish out hundreds of crores to politicians through electoral bonds. At least 16 of the top 200 firms in the electoral bonds list donated even when they ran their business in loss for three previous consecutive years.

While in losses they cumulatively donated a whopping Rs 710 crore to political parties. Of this, Rs 460 crore (over 60%) went to the Bharatiya Janata Party (BJP).

These companies did not make money for their shareholders and owners yet generated funds to secretly donate funds to political parties.

The Election Commission and the Reserve Bank of India had shared their fears about such dubious donations when the BJP government introduced the Electoral Bonds scheme in 2017 by amending four laws. They feared that the scheme permitted shell companies and others to funnel unaccounted and untaxed money from India and abroad into political parties.

Before the amendments brought in the electoral bonds scheme, a company could donate up to 7.5% of the average profits it earned over three previous financial years. This was done to ensure that only legitimate companies, doing some business, get to donate. It meant the company had to make profits, and there was a cap on how much they could donate.

For example, if a company earned an average profit of Rs 100 for three years, it was permitted to donate only Rs 7.5 in the fourth year. It was common sense that any company donating disproportionate to their profits are likely to be indulging in laundering black money into politics.

The BJP government struck off a line in the Companies Act in the 2017 Union budget to remove this cap. The scary size of financial juggernaut this amendment unleashed becomes apparent upon scrutinising the disclosures of electoral bonds alongside the corporate filings of some of the largest donors.

Telecom giant Bharti Airtel reported an average loss of Rs 9,716 crore between the financial year 2020-21 and 2022-23. Despite plummeting fortunes in the preceding three financial years, the company donated Rs 197.6 crore to political parties. Of this, Rs 197 crore went to BJP, Rs 50 lakh to the National Conference and Rs 10 lakh to the Rashtriya Janata Dal (RJD).

DLF Commercial Developers Limited, part of the realty major DLF group, donated Rs 20 crore in the financial year 2019-20 despite incurring a loss of Rs 210 crore in the same period. The company donated a total of Rs 130 crore through electoral bonds, all of which went to BJP.

Apart from the loss-making 16, at least 31 firms donated much beyond their three-year average profits. Kolkata-based liquor distribution firm Castle Liquors Private Limited barely managed an average of a little over Rs 6 lakh in the last three years but donated Rs 7.5 crore–118 times more–to political parties. About 90% or Rs 6.8 crore went to BJP and the remaining Rs 70 lakh to RJD.

The company donated this money in four instalments since April 2023. While the filings for the Financial Year 2023-24 are not available, the company managed to make only Rs 12 lakh in profits in the previous financial year. In the three prior years, the company made Rs 5 lakh, Rs 2 lakh and nil profits.

Lottery king Santiago Martin’s Future Gaming and Hotel Services Private Limited, the biggest electoral bonds donor, donated over 16 times its average three-year profits. It donated Rs 1,368 crore in total, of which over Rs 540 crore went to Trinamool Congress (TMC), Rs 509 crore went to Dravida MunnetraKazhagam (DMK), Rs 159 crore to YSR Congress, Rs 100 crore to BJP, Rs 80 lakh to Sikkim Krantikar iMorcha and Rs 50 lakh to Sikkim Democratic Front.

Similarly, Reliance-linked Qwik Supply Chain, which emerged as the third largest donor, donated 15 times its profit. Qwik Supply Chain donated over Rs 375 crore, or 90% of its total donations, to BJP. It donated Rs 25 crore to the Shiv Sena and the remaining Rs 10 crore to the Nationalist Congress Party.

One of the top 10 donors, Madanlal Ltd, a company linked to Kolkata-based Keventer Group, donated over 56 times its average three-year profit. It donated Rs 185.5 crore in the financial year 2019-2020, of which Rs 175.5 crore went to BJP and the remaining Rs 10 crore to the Congress.

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Vol 56, No. 42, Apr 14 - 20, 2024