Suspicions arise: Were bonds bought to avoid ED, I-T scrutiny?
New Delhi: A significant number of companies in the top donor list were under the scanner of the Enforcement Directorate or the Income Tax Department at some point of time during the past five years, according to analysis of firms which feature among the top purchasers of electoral bonds.
In some cases, a chunk of the bonds were bought by these firms, in the days following such searches. The Future Gaming and Hotel Services Pvt Ltd was the largest donor to political parties via the electoral bond route, with a cumulative sum of Rs. 1,368 crore, according to a report in The Hindu.
The electoral bond buying spree by Future Gaming was undertaken in 2019 just days after the Union Home Ministry issued a warning to states about its owner, the “lottery king’’ Santiago Martin, according to a report in The Indian Express.
The Centre’s message alerted the eight lottery running states about the alleged “frauds’’ and “irregularities’’ linked to Martin’s companies led by the flagship Future Gaming and Hotel Services Pvt Ltd and told them to stay away. The Home Ministry mentioned the states of West Bengal, Maharashtra, and Punjab where Martin was allegedly operating Future Gaming and Hotels, the report said.
The Home Ministry’s warning to states noted that it had received complaints with “serious allegations’’ against Martin and his lottery firms which pertained to GST evasion, printing unspecified number of tickets without the knowledge of the state government and his involvement in cases of frauds which were being probed by the Central Bureau of Investigation (CBI).
In May 2023, the ED had carried out searches at the residence of Santiago Martin in Chennai, the well known lottery magnate and the managing director of the company. The ED had also conducted searches in the business premises of the company in Coimbatore under the provisions of the Prevention of Money Laundering Act (PMLA). On April 2, 2022, ED had attached movable assets worth Rs. 410 crore under PMLA in the case of lottery scam against the company and its subsidiaries. Five days later, on April 7, 2022, the company made a significant purchase of electoral bonds worth Rs. 100 crore, marking one of their largest transactions on a single date. Of the Rs. 1368 crore worth bonds purchased by the company, 50 per cent were done before the ED searches and 50 per cent after the searches.
Similar pattern was followed by the other set of companies which included the Keventer Food Park Infra Ltd, the MKJ Enterprises Ltd, and the Madanlal Ltd. All these three firms are registered with the same address in Kolkata and have at least one common Director, The Hindu reported. The common director is Siddharth Gupta, but the three companies were incorporated in different years. These three companies together donated about Rs. 573 crore – the third highest – if purchases are considered cumulatively. While Keventer Food Park Infra Ltd purchased bonds worth Rs. 195 crore in three batches between April and May 2019, Rs. 185 crore worth of bonds were purchased by Madanlal Ltd between May 8 and 10, 2019.
Yashoda Super Speciality Hospital group in Hyderabad whose premises were searched by the I-T Department in December 2020, had donated Rs. 162 crores in multiple tranches beginning October 2021 and ending in October 2023.
Aurobindo Pharma’s Director Sarath Reddy was arrested by the ED on November 10,2022, for his alleged involvement in irregularities in the scrapped liquor policy of the Delhi government. Five days after the arrest on November 15, the company had purchased bonds worth Rs. 5 crore. A year later in November 2023, it had purchased bonds worth Rs. 25 crore. In total the company had purchased electoral bonds worth Rs. 52 crore in multiple trances between April 2021 and November 2023, of which Rs. 30 crore were done after Mr. Reddy’s arrest.
Income Tax searches were conducted on December 18,2023 on Shirdi Sai Electricals Limited’s factory premises on the outskirts of Kadapa. The raids were also conducted simultaneously at the Hyderabad office and its top officials’ residences. The company had purchased electoral bonds worth Rs. 40 crore on January 11, 2014. The newspaper reported that I-T searches were conducted at real estate development firm Kalpataru Projects International’s premises and residences of some of its directors and executives in August 2023. The company bought Rs. 25.5 crore worth electoral bonds between April 2023 and October 2023.
