EAS Sarma seeks immediate action on foreign donations of political parties
MONEYLIFE DIGITAL TEAM 31/03/2014 04:41 PM
Former Union Secretary EAS Sarma who along with others obtained a landmark order from Delhi HC on illegal foreign funding of political parties has called on the Election Commisison to initaite immediate against political parties and Vedanta group
Following a Delhi High Court order that donations to the BJP and Congress from the Vedanta Group prima facie voilated the law, former union secretary EAS Sarma has written to Chief Election Commissioner VS Sampath to initiate immediate action against the parties concerned and to revoke their tax exemptions. Mr Sarma and Association of Democratic Reforms (ADR) had filed a public interest litigation (PIL) in the Delhi High Court (Delhi HC) against foreign funding of political parties.
On 28 March, Delhi HC held that the BJP and Congress had, prima facie, violated the foreign funding law by receiving donations from UK-based Vedanta Resources’ subsidiaries and directed the Centre and Election Commission (EC) to take appropriate action against them within six months. As per Foreign Contribution Regulation Act (FCRA) companies like Vedanta come within the purview of the definition of a “foreign company” hence, in pursuance of rules political parties are prohibited from accepting donations from such foreign companies.
EAS Sarma said, “Vedanta has made donations to Congress, BJP and several other political parties like Trinamool Congress. This needs to be investigated urgently and action initiated.”
EAS Sarma has asked Mr VS Sampath to investigate donations received by all political parties from foreign companies during the last several years and proceed against them under FCRA and Representation of the People Act. He has asked for deterrent action, in view of the implications of such donations to the security of the nation and the integrity of our democracy.
EAS Sarma has asked to investigate the bona fides of Vedanta’s Public and Political Awareness Trust and the electoral trusts set up by the other foreign companies in terms of implicit/explicit violation of FCRA/Representation of the People Act and take urgent action to comply with the letter and spirit of those laws. Sarma further said, “If necessary, bring all electoral trusts set up by foreign companies within the ambit of FCRA by a suitable legislative amendment. The trusts should make a public disclosure of their financial dealings.”
He writes, “Vedanta has also evidently set up a trust known as Public and Political Awareness Trust, specifically for making political donations. This is clearly an indirect way to channel political donations. It is doubtful whether routing political donations through an electoral trust complies with the provisions of FCRA. I understand that several companies have followed this modus operandi. A thorough investigation will reveal the goings on in these trusts which function in a highly non-transparent manner”.
EAS Sarma requested chief election commissioner to appreciate the rationale of FCRA/ Representation of the People Act and the legislative intent that underlies it and decide once for all not to appeal against the Delhi High Court judgement. Sarma said, “I believe that the concept of private companies giving donations to political parties is per se objectionable as such donations have vitiated the democratic processes and led to mis-governance on a large scale. In particular, such donations from foreign companies amount to a slap on the face of India’s democracy and they compromise the national security.”
The London based Vedanta in its annual report of 2013 clearly mentions that, “in accordance with the normal accepted practice in India of making political donations, the group made political donations of USD2.01 million in 2012 and USD0.97 million in 2013 through a trust or directly in respect of the Indian general election. The board believes that supporting the political process in India will encourage and strengthen the democratic process.”
Vedanta’s listed subsidiary firms; Sesa Goa paid Rs30 lakh to the Bharatiya Janata Party (BJP) in 2012-13, while Sterlite Industries gave Rs5 crore to the Public and Political Awareness Trust, set up by the group to make political donations. In August 2013, Vedanta merged both subsidiaries into Sesa Sterlite. Sesa Goa’s annual report showed its political donations dropped significantly in 2012-13 to Rs30 lakh from Rs4.65 crore in 2011-12 as its operations were hit by a mining ban.
Sesa Goa has made donations of Rs2 crore to the Congress, Rs1.75 crore to BJP, Rs50 lakh to Maharashtrawadi Gomantak Party, Rs15 Lakh to All India Trinamool Congress, and Rs25 lakh to Nationalist Congress Party (NCP) during 2011-12.Vedanta donated USD5.69 million to political parties in India between 2009-10 and 2011-12. This includes USD3.66 million during 2009-10, when the previous general elections were held. Since listing on the London Stock Exchange in 2003, the company has donated USD8.29 million to Indian political parties.