A joint investigation by The Hindu and an independent research team revealed 45 companies that donated significant sums through electoral bonds, categorizing them into four groups (A, B, C, and D), exposing potential irregularities and loopholes in the system and raising concerns about transparency and accountability in political financing due to suspicions surrounding the sources of funds and complex financial activities hinting at possible malpractice.
In the most concerning category, 33 companies collectively donated ₹576.2 crores in electoral bonds, primarily encashed by the ruling Bharatiya Janata Party (BJP). What's alarming is that these companies reported negative or near-zero profits over a seven-year period, totalling over ₹1 lakh crore in aggregate net losses. Furthermore, 16 of these companies (category A) paid zero or negative direct taxes, signalling potential discrepancies in their financial reporting and raising red flags for money laundering.
Another six companies (category B) donated ₹646 crore, with 93% of the amount encashed by the BJP. While these companies reported positive net profits, the sums donated through EBs exceeded their aggregate profits significantly. This suggests a possible scenario where these companies acted as fronts for other entities or misrepresented their financial standing.
Category C includes three companies that donated ₹193.8 crore, distributing funds among various political parties. Despite positive net profits, these companies reported negative direct taxes, hinting at potential tax evasion practices.
The final category, D, comprised three companies that donated ₹16.4 crore in electoral bonds. These companies, with no reported data on net profits or direct taxes paid over seven years, raise suspicions of being shell companies involved in money laundering activities.
These findings underscore significant flaws in the electoral bond scheme, a system introduced by the government purportedly to ensure transparency in political funding. However, internal communications between the Reserve Bank of India (RBI) and the Finance Ministry, dating back to January 2017, reveal concerns regarding the efficacy of the scheme.
The RBI expressed doubts about the transparency of the scheme, highlighting that the anonymity of bond buyers could facilitate money laundering. Despite assurances from government officials, including the then-revenue secretary Hasmukh Adhia, regarding the mechanism's ability to keep donor identities secret while ensuring legal funding, the concerns raised by the RBI persist.
The revelations have sparked widespread criticism from opposition parties and civil society organizations, demanding immediate action to address the loopholes in the electoral bond scheme. Questions are being raised about the government's commitment to transparency and accountability in political funding, with calls for a thorough investigation into the companies involved in suspicious donations.
In response to the allegations, the ruling BJP has maintained that all donations received through electoral bonds are legal and transparent, adhering to existing regulations. However, opposition parties argue that the lack of transparency surrounding the scheme enables nefarious actors to influence political decisions clandestinely.