New Delhi, India – It was a quick chain of events. On November 10, 2022, India’s Enforcement Directorate – the country’s premier agency tasked with tackling financial corruption – arrested P Sarath Chandra Reddy, an entrepreneur in the southern city of Hyderabad, on allegations of involvement in a liquor scam in New Delhi.
Five days later, Aurobindo Pharma, a company in which Reddy is a director, bought electoral bonds worth 50 million rupees ($600,000). Until the Supreme Court declared them “unconstitutional” last month, these bonds – introduced by Prime Minister Narendra Modi’s government in 2017 – were an opaque mechanism for businesses, individuals and organisations to donate funds to political parties.
All of those bonds bought by Aurobindo Pharma went to Modi’s Bharatiya Janata Party (BJP), which encashed them on November 21. Just seven months later in June 2023, Reddy turned a state witness – known as an approver in India. And in November 2023, Aurobindo Pharma – which has not responded to Al Jazeera’s questions on its donation pattern – gave 250 million rupees ($3m) more to the BJP through electoral bonds.
That’s just one of a series of revelations that have emerged from a giant data dump by the State Bank of India (SBI), which oversaw the electoral bond scheme, after being forced to release all information about the project by the Supreme Court over repeated hearings this past month.
And the disclosures, say transparency activists, are worrying: Multiple private firms, reeling from investigations by India’s law enforcement agencies, funnelled funds worth millions of dollars through the electoral bonds to a range of parties in power, an analysis of the data published by India’s Election Commission reveals. Many of them saw the government’s attitude towards them change after the donations, while some even won praise from sitting ministers.
As the nation’s 960 million voters gear up for a crucial national election, the revelations have deepened fears that the electoral bond mechanism enabled a quid-pro-quo setup between companies and political parties, creating a stink of extortion and corruption.
The latest data made public by the election commission include unique serial numbers per bond that finally allow mapping of the donors to the receiving parties, which was managed after a string of “no-nonsense” raps for the SBI from the top court, petitioners told Al Jazeera.
All of the top 10 corporate donors – from pharma to construction companies – who were being probed by the central law enforcement agencies in the last five years, paid the BJP in some measure, accumulating over 13 billion rupees ($15.5m), the dataset revealed.
But Zafar Islam, a national spokesperson for the BJP, said that’s no evidence of any wrongdoing. “We have the most members in the parliament and elected members in several state assemblies. That’s why we have gotten the highest donations on merit,” he said. “It is very unfair to cast any quid-pro-quo doubts here.”
And while the BJP was by far the largest beneficiary of the scheme – getting a total of 60 billion rupees ($720m) over seven years – a range of other political groups, including regional parties that rule different states, were also major recipients of this funding. Many electoral bond donors also won lucrative government deals.
“There are companies who have gotten large government contracts, and either before or after the deal, they have given funds to the ruling parties, whether at the centre or at the state level,” says Anjali Bhardwaj, co-convener of the National Campaign for People’s Right to Information, referring to the findings.
The pattern, she said, indicates two possibilities: “Extortion, where agencies were actively set after someone to extract money, or [the agencies were probing] straight allegations of corruption, which were put in cold storage after a donation was made to the ruling party.”
A lottery king’s gamble
India’s top electoral bond buyer, Future Gaming and Hotel Services Private Limited, run by 63-year-old “Lottery King” Santiago Martin, has faced raids and probes by multiple law enforcement agencies in the last two decades over money-laundering, funds embezzlement and frauds.
Martin, who was born in India’s Andaman and Nicobar Islands in the Bay of Bengal in 1961, worked as a labourer in Myanmar before returning to Coimbatore, in the southern Indian state of Tamil Nadu. There, he built a lottery empire that now spans India and its neighbouring countries.
Future Gaming bought bonds worth 13.68 billion rupees ($163m) between October 2020 and January 2024. The largest chunk of Martin’s donations, over 5.4 billion rupees ($64.8m), went to the Trinamool Congress…
Read More: India’s electoral bonds laundry: ‘Corrupt’ firms paid parties, got cleansed |