New Delhi: Two companies — one, a lottery firm probed and chargesheeted by the Enforcement Directorate in September 2023 and another accused of misappropriating funds from a Telangana irrigation project and raided by the Income Tax Department in October 2019 — emerged as the top political donors between 12 April, 2019, to 11 January this year, shows ThePrint’s analysis of the data on the Electoral Bonds scheme uploaded by the Election Commission of India on its website Thursday.
According to this data, uploaded following the Supreme Court’s directive, the lottery firm, Future Gaming and Hotel Services PR, contributed Rs 1,368 crore via electoral bonds of Rs 1 crore denomination each, while Megha Engineering and Infrastructure Pvt. Ltd (MEIL) donated Rs 966 crore in a similar format.
Electoral Bonds are interest-free instruments that can be purchased by companies in denominations of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore to fund political parties. The firms buy the bonds from branches of State Bank of India (SBI) and then political parties redeem it to get the money according to the value of a particular bond.
The scheme was introduced as part of the Finance Bill in 2017. The then finance minister Arun Jaitley had said the scheme was brought in to “cleanse the system of political funding in India”.
Over the past few years, Opposition parties and activists have taken great offence over the anonymity factor involved in the purchase and redemption of the bonds by political parties.
Last month, the Supreme Court also deemed the scheme “unconstitutional and manifestly arbitrary” and ordered SBI to stop further issuance of the bonds.
It had also asked the bank to furnish all details related to the bond purchase and redemption by 6 March. The bank had moved the top court seeking time till 30 June but was denied extra time and was asked to give all details to the ECI by 12 March.
The data on electoral bonds was submitted to the poll panel by SBI Tuesday, in line with the deadline set by the Supreme Court which had also directed the EC to make this data public by 15 March.
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Company chargesheeted by ED
Founded in 1991, Future Gaming and Hotel Services PR, formerly Martin Lottery Agencies Limited, based in Coimbatore is a leading lottery company in India founded by Santiago Martin.
Martin and his firm were booked by the Cochin zonal office of the Central Bureau of Investigation (CBI) in 2011.
Based on the final report by the CBI, the ED registered a case of money laundering and found that Martin and his net of companies made “unlawful gain” amounting to Rs 910 crore by causing loss to the Sikkim government by inflating the price of prize-winning lottery tickets between 2009 and 2010.
The agency has made several attachments in the case, amounting to more than Rs 500 crore last year in September.
Additionally, during the same time, the ED had also filed a prosecution complaint against the company and said that it had dishonoured the agreement it signed with states for selling the state-organised lotteries across India and that it was not transferring the entire sale proceeds to the state governments.
“The modus operandi also includes illegally retaining unsold lottery, claiming prizes on unsold lotteries, manipulating data to show unsold prize-winning tickets as sold and claimed prizes on same, which are also in contravention of Lottery Regulation Act, 1998,” the ED had said after filing a prosecution complaint against the Future Gaming and Hotel Services PR and 14 other firms.
As part of the probe, the agency had attached proceeds of crime amounting to Rs 411 crore, it said in the statement on 22 September, 2023.
Megha Engineering and Infrastructure Ltd.
Headquartered in Hyderabad, Megha Engineering and Infrastructure Pvt. Ltd has donated a whopping Rs 966 crore. Its first electoral bond was purchased on 12 April May, 2019, and its last on 12 October last year, the data uploaded by the EC showed.
All the 966 bonds purchased by the company were of Rs 1 crore denomination and the company purchased four bonds of Rs 1 crore each on 3 October, 2019 — just a week before the teams of the Income Tax Department conducted raids on the premises linked to the firm and its managing director P.V. Krishna Reddy.
The company purchased bonds worth Rs 140 crore on 11 April, 2023, just a month before bagging a massive infrastructure contract worth Rs 14,400 crore to build the Thane-Borivali twin tunnel project in Mumbai.
Another company named Western UP Power Transmission Company Limited, which has P.V. Krishna Reddy as Director, purchased 30 bonds of Rs 1 crore each on 11 January this year, and overall 220 bonds of Rs 1 crore each, making the cumulative donation from the group around Rs 1,200 crore.
Megha Engineering and Infrastructure Pvt. Ltd also got the contract for the Kaleshwaram Irrigation project over the Godavari River in Telangana, which was a flagship project of the previous state government led by K. Chandrashekar Rao (KCR).
The project, which was inaugurated by KCR in June 2019, was highlighted in a report by the Comptroller and Auditor General (CAG) tabled in the state assembly in February, which called the project “economically unviable”.
“The Benefit-Cost Ratio (BCR) of the project was inflated. Even with the understated project cost of Rs 81,911.01 crore, BCR works out to 0.75. Considering the latest likely project cost (Rs 1,47,427.41 crore), the BCR works out to 0.52. This means that every rupee spent on the project would yield only 52 paise. It clearly indicates that the project was, ab initio, economically unviable,” the CAG had said in the performance audit of the project.
Earlier last month, ThePrint reported that although the project has not been providing water to the state for irrigation purposes as planned during its launch, it is costing the exchequer a whopping Rs 18,000 crore annually.
(Edited by Richa Mishra)
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