Vedanta Resources Plc, Anil Agarwal’s controversial multinational
company is not the only one to have made illegal donations to Indian
political parties, says EAS Sarma, former secretary with the Union
Government. In another letter to the Chief Election Commissioner, Mr
Sarma has pointed out that as per information compiled by Association
for Democratic Reforms (ADR), during 2007 to 2009 the Bharatiya Janata
Party (BJP) received donations from two companies. Similarly, the Indian
National Congress or INC (yes, this is the real name of Sonia
Gandhi-led party, which is often referred as just ‘Congress’ or “Indira
Congress” or Congress-I) and Samajwadi Party (SP) also received
donations.
Nippon Investment and Finance Pvt Ltd, one of the promoters of Videocon
Industries, donated Rs1 crore while a Honda group unit gave Rs15 lakh
to the BJP as donation. Venugopal N Dhoot, chairman and managing
director of the Videocon Group is one of the directors of Nippon
Investment and Finance. During the same period, Mulayam Singh Yadav-led
SP also received Rs10 lakh from the Honda group while Congress received
Rs2 lakh from State Trading Corporation of India (STC) and MMTC, both
owned by the Union government.
“Under Sections 3 & 4 of Foreign Contributions (Regulation) Act
(FCRA), 1976, political parties are not permitted to accept
contributions from foreign companies or companies controlled in India by
foreign companies. In addition, under Section 293A (1)(a) of Companies
Act, political parties cannot receive contributions from government
companies,” Mr Sarma pointed out.
He said, “These contributions are clearly illegal. There are other
companies which seem to be foreign companies the details of which need
to be ascertained by Election Commission (EC) on its own. If there are
other foreign companies, political parties would have violated FCRA
provisions. They need to be proceeded against.”
Here is the report prepared by ADR...
Mr Sarma had earlier written to the Election Commission about Vedanta, with extracts from its annual report. “The company (Vedanta) is not permitted to make such a dubious contribution
in the UK and other European countries. However, the company has
condescended to contribute to our own political parties for ‘supporting
the political processes...’ and encourage and strengthen the democratic
process!” said the former secretary.
Calling Vedanta’s action as “violation of the laws of the land”, Mr
Sarma, requested the Election Commission (EC) to consider imposing an
outright ban on all such contributions, as is the case with the
democracies of Europe.
According to the former secretary, donations to political parties
should not amount to blatant corruption and bribery and an affront to
the rule of law. Here are the three concerns raised by Mr Sarma in his
previous letter to the EC...
1. The Vedanta group is a London-based foreign multinational
company and its contributions attract the prohibition envisaged under
Sections 3 & 4 of Foreign Contributions (Regulation) Act, 1976 (as
amended from time to time). Under Section 3(1)(e), in particular, “no
foreign contribution shall be accepted by any political party or office
bearer thereof”. This stipulation applies to Vedanta and all other
companies controlled by it. As such, both Vedanta and those political
parties that have received the donations are liable to prosecution under
this Act. ECI should quickly consult the ministry of home affairs on
the legal aspects involved.
2. Sections 29B & 29C of the Representation of the People’s
Act, 1951, requires that the concerned political parties should make a
declaration to ECI on the donations received thus from private
companies. ECI should ascertain whether the concerned parties have
complied with this.
3. Section 293 A(4) of the Companies Act requires the companies
making the donations to political parties to disclose the same with the
details explicitly in their respective profit & loss account
statements. The ministry of corporate affairs should cause a
verification of this and take necessary action in case there is any
infringement.
Requesting EC to investigate expeditiously these statutory violations and proceed against both the political parties and companies involved, Mr Sarma said the Commission should carry out the investigation transparently so that there may be public accountability.