ED, I-T, regulator heat: 11 infra firms bought Rs 506-crore electoral bonds

Take for instance, Chennai Green Woods and Madhya Pradesh Waste Management — linked to Hyderabad-based Ramky Group whose chairman is the YSRCP MP Ayodhya Rami Reddy — collectively purchased electoral bonds worth more than Rs 111 crore between May 2019 and October 2023.

Chennai Green Woods, a construction company, had purchased bonds worth Rs 40 crore in January 2022. In July 2021, the I-T Department had conducted a search operation on the Ramky Group and seized allegedly incriminating documents indicating unaccounted transactions.

A similar proximity in electoral bond purchases and investigative action was seen for Dhariwal Infrastructure, part of the RP-Sanjiv Goenka Group. Between July 2021 and October 2023, Dhariwal Infrastructure, purchased bonds worth Rs 115 crore, four-fifth of which (Rs 95 crore) were bought starting October 2022.

This was just months after July 2022, when the Central Bureau of Investigation (CBI) had registered an FIR against a number of entities including the CESC Ltd (a subsidiary of the RP-SG Group, of which Dhariwal is a subsidiary) over alleged irregularities in a 27-year-old allocation process of the Sarisatolli, Tara and Deocha Pachami blocks in West Bengal from 1993 to 1995. Haldia Energy, also an RPSG company and among the top donors was purchasing bonds starting from 2019 — this company had donated Rs 377 crore until 2024.

Between April 2023 and October 2023, Kalpataru Projects International Limited bought Rs 25.5 crore worth of electoral bonds. Kalpataru, engaged in power transmission and distribution, buildings and factories, water supply and irrigation, railways, oil and gas pipelines, urban mobility, highways, and airports, bagged several key projects including one for underground metro tunnelling in December 2023.

Around the time the company bought bonds, in August 2023, the I-T Department had conducted searches at various premises linked to Mumbai-based Kalpataru Builders over alleged tax evasion. Various entities under Kalpataru Group of Companies, including the listed entity Kalpataru Projects International Limited, are under the department’s scrutiny for alleged financial irregularities.

My Home Infrastructures Private Limited, part of the Telangana-based My Home Group of companies purchased bonds worth Rs 24.5 crore between July and November 2023. But this was not just the only company in the group that bought bonds. Its other related entities such as Tellapur Technocity bought bonds worth Rs 20 crore, and Aqua Space Developers, purchased bonds worth Rs 15 crore, all in July 2023 – bringing the group’s total purchases to close to Rs 60 crore.

While it could not be ascertained if the bonds purchased by these companies were donated to a specific political party, the purchases were close to the elections held in Karnataka (May 2023) and Telangana, Madhya Pradesh, Mizoram, Rajasthan and Chhattisgarh (November 2023).

The Telangana-based MyHome Group had earlier faced action from the tax department. In 2019, the I-T Department raided the house and office of Rameshwar Rao Jupally, the founder and chairman of the MyHome Group over alleged tax evasion suspicions. The My Home Group is also related to the Associated Broadcasting Company which owns the TV9 media group. Incidentally, Megha Engineering (which is the second largest purchaser of the electoral bonds) also owns a stake in the group.

Speaking at the India Today Conclave on Friday, Union Finance Minister Nirmala Sitharaman had rejected any link between functioning of the investigative agencies, including ED, to the electoral funding of the ruling party, saying these charges were just assumptions. “I think you have based yourself on huge assumptions – that the money was given after the ED raid happened. For all you know, the money was given earlier and in spite of that we went knocking at their doors. Am I making sense? No? What if the companies gave money and after that we still went knocking on their doors through ED. Is that a probability or not?” she said.

Cement major UltraTech Cement, which is a part of the Aditya Birla Group, purchased electoral bonds worth Rs 35 crore — Rs 5 crore in October 2019, Rs 10 crore each in October 2020 and January 2022, with the most recent purchase recorded in November 2023 for Rs 10 crore. The first donation by the cement behemoth had come two months before December 2020, when UltraTech along with other top cement manufacturing companies had faced raids by the antitrust watchdog, the Competition Commission of India (CCI), over allegations of price coordination and collaborating levels of cement supply.

The company also got entangled later in disputes over tax demands raised by the Goods and Services Tax (GST) authorities. In November 2023 as well as January 2024, the company disclosed in regulatory filings that it got demand orders worth Rs 1.14 lakh and Rs 72 lakh, respectively.

Similarly, between October 2021 and November 2023, Rashmi Cement and Rashmi Metaliks, subsidiaries of the same company, bought electoral bonds worth almost Rs 91 crore. Incidentally, in July 2022, the Enforcement Directorate (ED) said it had frozen bank deposits with about Rs 95 crore after it raided multiple premises of the West Bengal-based Rashmi group of companies – which owns Rashmi Cement and Rashmi Metaliks. The action was related to an alleged loss of Rs 73.4 crore to the exchequer by what the ED called “deliberate mis-declaring (of) facts and mis-utilisation of dual freight policy of the Indian Railways to avail the wrongful benefits of lower tariff of freight for transportation of iron ore”.

Of the total Rs 91 crore, the two companies bought a majority of the bonds – worth Rs 53 crore – after the ED’s action. It is worth noting, though, that in August 2022, the Calcutta High Court gave Rashmi Metaliks a clean chit in the money laundering case.

Authum Investment and Infrastructure Ltd, a non banking financial firm purchased bonds worth Rs 25 crore between April 2022 and January 2023. In October 2022, Authum had completed the acquisition of debt-ridden Reliance Commercial Finance Limited (RCFL), a wholly owned subsidiary of Reliance Capital, and offered loans for various purposes including infrastructure projects.

In December 2023, Authum had alerted the stock exchange that a search and seizure operation was conducted at its corporate office and related residential premises over two days between December 14 and 16.

While Kolkata-based Keventer Food Park Infra, MKJ Enterprises (a manufacturer of stainless steel) and Madanlal Ltd. – which are linked entities – collectively donated Rs 572.5 crore, a fourth less known related company Sasmal Infrastructure Ltd., donated Rs 44 crore. MK Jalan, the managing director of MKJ Enterprises, is also a director at Sasmal Infra.

In 2017, the West Bengal government had approved the sale of its entire stake of 47 per cent in Metro Dairy to Keventer, owned by the Jalan group of Kolkata, at a consideration of Rs 84.5 crore. In February 2021, the ED conducted raids at Keventers’ office as part of its probe in the money-laundering aspect of Metro Dairy’s share transfer to a private firm.

It is difficult to ascertain a ‘quid pro quo’ in these cases since the State Bank of India has so far not shared the matching number of the electoral bonds to link the purchaser with the political party. Also, in some cases, companies had faced investigative action much before the electoral bond scheme was rolled out.