Electoral Bonds: The Possible Quid Pro Quo- Part1
Moneylife Digital Team 22 March 2024
The public disclosure of subscription to electoral bonds, mandated by the Supreme Court, has revealed several questionable practices that demand further scrutiny. Reports indicate that some companies have spent multiples of their annual profits to donate to political parties through electoral bonds. Additionally, some companies have allegedly used indirect methods to purchase these bonds. Perhaps most troubling is the allegations that central investigative agencies like the directorate of enforcement (ED), income-tax department (I-T), and central bureau of investigation (CBI) have been deployed as a means to compel companies to make donations.
Data from State Bank of India (SBI) suggests that at least 14 out of the top-30 companies which purchased electoral bonds between 12 April 2019 and 24 January 2024 have faced action by Central or state probe agencies.
Allanasons: The Allanasons group, the beef exporter, donated Rs6 crore on 9 July 2019 (three entities), Rs1 crore on 9 October 2019 and Rs2 crore in January 2020. Here comes the interesting part: the Mumbai wing of the I-T department conducted raids on the Allana group in January 2019. The raids were conducted at 100 units for over two days, as per The Economic Times.
The report mentioned that nearly three months following the survey conducted by the I-T department on the Allana group, tax officials had reportedly discovered that the meat exporter may have evaded paying taxes worth Rs2,000 crore, according to two individuals familiar with the matter.

Grasim Industries: As per a report from The Reporters Collective, The Aditya Birla group has made a total donation of Rs534 crore, distributed as follows:

  • Rs224 crore from Essel Mining and Industries Ltd
  • Rs135 crore by Utkal Alumina International Ltd
  • Rs35 crore through Ultratech Cement
  • Rs105 crore by Birla Carbon
  • Rs33 crore through Grasim Industries
  • Rs2 crore through Birla Estate Pvt Ltd

In August 2021, the Union government lifted the anti-dumping duty on viscose staple fibre (VSF), a man-made, biodegradable fibre used in textiles manufacturing which had been Grasim's speciality for decades.

The decision to remove the anti-dumping duty on VSF followed an order by the competition commission of India (CCI), which found that Grasim had abused its dominant position in the VSF market "by charging discriminatory prices to its customers, denying market access and imposing supplementary obligations upon its customers." This decision opened the door for foreign manufacturers to enter the market with cheaper products, adversely impacting Grasim.

However, as per an investigative report from The Indian Express,  Grasim officials reportedly lobbied successfully with Piyush Goyal, the Union minister for textiles, to implement stringent quality control measures in the sector. The order outlining stricter quality control measures was issued in December 2022, effectively restricting imports from China and Indonesia. These imports had previously sustained the operations of small- and medium-sized companies.

In less than a year since India implemented a stringent quality control order for VSF, a crucial raw material in the textiles supply chain, imports of VSF plummeted by 65%. This development enabled Aditya Birla group-owned Grasim Industries to strengthen its market share to 95%, up from 90%.

Rithwik Projects: Rithwik Projects is a mining and infrastructure company founded by Bharatiya Janata Party (BJP)'s Rajya Sabha member CM Ramesh. He was a member of the Rajya Sabha from the Telugu Desam Party (TDP) but resigned in 2019 after the I-T raids in October 2018 and immediately after TDP lost power in 2019.

In October 2018, during his tenure with the TDP, the I-T department conducted searches at his residence and locations. Mr Rajesh, his brother and executive director at Rithwik Projects, was also reportedly subjected to these searches. The MP characterised the raids as 'a clear instance of political vendetta', alleging that the Union government had been targeting TDP leaders for the past 15 days. In June 2019, Mr Ramesh, along with four other MPs from TDP, resigned to join the BJP. This decision followed the TDP's loss of power in Andhra Pradesh.

A report by The Reporters Collective says Rithwik Projects donated Rs5 crore through electoral bonds in January 2023, ahead of the February 2023 elections in Tripura, Meghalaya, and Nagaland. Additionally, it purchased bonds worth Rs40 crore in April 2023, prior to the Karnataka elections.

Ramky Group: In July 2021, I-T investigators conducted raids on 15 properties belonging to the Ramky group, including its headquarters in Hyderabad. The investigation focused on suspected tax evasion involving the group's fabrication of losses amounting to Rs1,200 crore. Additionally, the Ramky group, which owns the construction company, has been subjected to raids by the ED, CBI, and I-T authorities on multiple occasions.

After the raids, in January 2022, the group donated Rs40 crore, followed by another donation of Rs50 crore in April 2022 and a further Rs15 crore in October 2023.

These donations were made before the state assembly elections in Uttar Pradesh, Goa, Uttarakhand, Punjab, and Manipur.

The group was established by Alla Ayodhya Rami Reddy, a Guntur businessman-politician member of Andhra Pradesh's ruling YSR Congress Party. He was appointed to the Rajya Sabha in 2020 by the YSR Congress Party.

1 month ago
traffic constable told the driver that he can break traffic rules....just grease my hands and go ahead break the rules. only innovation is greasing is done in a new method.
what is so complicated in this.
100 mein se 80 baimaan, phir bhi, mera bharat mahaan
1 month ago
There is possibility of the ruling party raiding these entities once they come back to power and pin down the opposition with charges of money laundering and the public will get enthused. Amdist the euphoria, the ruling clan will gain much more and there will be a new law.
1 month ago
This is broad Daylight Robbery, but in a different format.
1 month ago
"Possible". So, basically, speculation?
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