The martial art of extracting donations

There is considerable interest in the list which may reveal the identity of companies including shell companies, loss-making companies and foreign-owned companies which may have funded India’s political parties. Such details were hidden from both voters and the ECI till now.

Meanwhile, the investigation by Newslaundry–TheNewsMinute revealed a disturbing pattern of raids by central agencies following which companies and business houses are seen to have donated to the ruling party, seemingly confirming the suspicion that there was a quid pro quo involved in political donations.

According to the government’s data shared in Parliament in February 2024, bonds worth over Rs 16,518 crore have been sold since 2018. From 2018 to December 2022, bonds worth Rs 1,000 denomination formed just 0.01 percent of the total sales while those worth Rs 1 crore made up 94.41 percent, according to an RTI response received by transparency activist commodore Lokesh Batra (retired).

These donations were most likely from corporate firms, hiding behind individuals or shell companies. The investigation revealed that at least 30 companies, which donated to the BJP between 2018–19 and 2022–23, faced penal action by central agencies, and 23 had never donated any amount to the BJP between 2014 and the year of the raid.

Four of these companies coughed up donations to the BJP within four months of the ED visit; and six companies, which were already donors to the party, donated heftier amounts in the months following the raids. Six other firms faced action by central agencies after they skipped donations in one financial year.

At least three donors, who are not part of the list of 30, have been accused of receiving undue favours from the Union government. Only three of these 33 companies donated to the Congress. Shree Cements, India’s third-largest cement producer based in Kolkata donated Rs 12 crore to the BJP in 2020–21 and 2021–22 but did not contribute any amount in 2022–23.

It was searched by tax sleuths in June 2023 in a raid described as vendetta by the opposition even as the IT Department accused the company of a Rs 23,000 crore tax evasion. Weeks after the tax raid, Shree Cements exited from the race to acquire Sanghi Industries—the company was eventually acquired by the Adani Groupowned Ambuja Cement.

The opposition had then accused the BJP of armtwisting corporate rivals of the Adani Group. In January 2024, the IT Department demanded Rs 4,000 crore as arrears of tax and penalty from Shree Cements.

This is just one of the several case studies presented by the investigation carried out among others by Prateek Goyal, Kora Abraham, Nandini Chandrashekhar and Basant Kumar.

(Excerpts from the three-part report by Newslaundry–TheNewsMinute)