Electoral bonds: Hyderabad's top donors MEIL, Hetero, Aurobindo faced raids, funding followed

Hyderabad: The Bharat Rashtra Samithi received a whopping Rs 1,214 crores in funding via electoral bonds, revealed the documents submitted by the State Bank of India to the Election Commission. The regional party in Telangana stood fourth among the top 27 parties that have received maximum funding.

However, the BJP bagged the gold with Rs 6,060.51 crores in donations followed by All India Trinamool Congress at Rs 1,609 crores. The grand old party Indian National Congress stood third with Rs 1,421 crores in donations.

Hyderabad-based Megha Engineering and Infrastructure Private Ltd topped the charts for being the biggest political donor in the country. Under the banner of MEIL and Western UP Power Transmission Limited, the group has donated close to Rs 1,200 crores.

Political contributions to Telugu two states

Two regional parties from the Telugu states also occupied prominent spots; the YSR Congress Party stood seventh and received funds worth Rs 337 crores, closely followed by Telugu Desam Party with Rs 218.88 crores in donations.

It is pertinent to note that former chief minister K Chandrashekar Rao-led BRS, now sitting in the opposition in Telangana, received a whopping Rs 683 crores in donations in the financial year 2022-23 of which Rs 529 crores came via electoral bonds, i.e. 80 per cent of their earnings via electoral bonds, where the identities of the donors are concealed as ‘undisclosed sources.’

SBI has yet to submit complete information

In total, 27 political parties received a breathtaking Rs 12,769.01 crores raised through 20,421 bonds during the financial period 2018-2024. The SBI and the EC have not submitted the data related to the links between the buyer and the purchaser (political party). This means that although the public has the list of donors and the list of political parties and how much they have received via electoral bonds, the data regarding which donor contributed to which party is yet to be revealed.

Electoral bonds’ donors have a history of raids

Hetero Drugs and Hetero Labs: The Hyderabad-based pharma giant – featured in the list of donors by purchasing bonds worth Rs 60 crores – was raided by Income Tax sleuths in 2021.

On October 6, 2021, the anti-tax evasion wing of the Income Tax department searched the offices of Hetero labs at 50 locations across six states with Hyderabad as its epicentre and seized Rs 142 crores. The estimated amount of unaccounted cash amounted to around Rs 550 crores.

Company and chairman

The Hetero pharmaceutical group is in the business of manufacturing intermediates, Active Pharmaceutical Ingredients (APIs) and formulations. A majority of the products are exported to foreign countries, primarily the USA, Europe, Dubai, and African countries.

As per the affidavit filed by Bandi Parthasaradhi Reddy, chairman of Hetero Group of Companies, with the ECI, his movable properties have been pegged at Rs 3,858 crores while his immovable properties are pegged at Rs 50 crores.

The Hetero Group chairman’s revenue is Rs 135 crores. Most of Parthasaradhi’s assets lie in the shares of Hetero Labs, Honour Labs, Hetero Drugs, Hindys Labs, and Hazelo Labs. He also has investments in mutual funds of Rs 179 crores. There are four cases registered against him, all under the Drugs and Cosmetics Act. Of the four cases, two are filed in Muzaffarpur in Bihar, one in Salem, Tamil Nadu, and one in Solan, Himachal Pradesh.

Megha Engineering and Infrastructure Private Limited (MEIL): This Telangana-based company was raided by Income Tax sleuths in 2019.

MEIL – run by India’s 54th richest man PV Krishna Reddy – also donated Rs 87 crores to Prudent Electoral Trust in FY 2023. The business tycoon whose wealth skyrocketed to USD 4.05 billion in 2023, according to Forbes magazine, is likely to be the biggest political funder based out of Hyderabad.

MEIL features in both the list - Electoral bonds and Electoral trusts. Though the link between donors and buyers is yet to be publicised, it is indicated that multiple political parties benefited from the funding.

Aurobindo Group: This conglomerate is another major donor from Hyderabad. It made headlines for the wrong reasons when its director P Sarath Chandra Reddy – YSRCP Rajya Sabha MP Vijay Sai Reddy’s son-in-law – was arrested by the CBI in the Delhi liquor policy scam.

Sarath Chandra was also identified as a key person in the ‘South Group’. It is quite surprising to see that Sarath Chandra, a full-time director and promoter of Aurobindo Pharma, is one of the TTD (Tirumala Tirupati Devasthanams) board members. Reddy was recently charge-sheeted by the Central enforcement agency in the case and was the second person to become an approver.

Yashoda Hospitals: The city-based Yashoda Hospitals donated Rs 10 crores to the Bharatiya Janata Party (BJP) during the financial year 2021-2022, according to the report submitted by the party to the Election Commission of India.

The timing of the donation is significant since it comes a year after the Yashoda Group was raided by Income Tax sleuths. On December 23, 2020, the I-T officials searched the properties owned by Yashoda Healthcare Services Private Limited.

The 33-year-old Yashoda Group was founded by Dr G Surendar Rao who later teamed up with his brothers G Devender Rao and G Ravender Rao to expand operations and start Yashoda Hospitals.

Infra and pharma giants top list of donors

It is interesting to note that the donors’ list featured a high number of companies from the infrastructure and pharma sectors

This is evident from the list which includes industry giants as Divis Labs, Dr Reddy’s Labs, Navayuga, Yashodha Hospitals, Sun Pharma Labs, Arihant Enterprises, Sandhya Constructions, Bharat Biotech, Sagar Cements, My Home, Sri Developers, Vasavi Avenues, Sunil Engineering, Eugla Pharma Specialities, Aparna Farms, Cyber homes, SLVR Homes.

What are electoral bonds?

An electoral bond is a financial tool for making donations to political parties and the term was first mentioned by finance minister Nirmala Sitharaman in the Union Budget 2017-18.

The scheme, notified by the Central government on January 2, 2018, was pitched as an alternative to cash donations made to the political parties as part of efforts to bring transparency in political funding.

According to the Electoral Bond Scheme 2018, an electoral bond is issued like a promissory note, which is bearer in character. It means it does not carry the name of the buyer or payee, no ownership information is recorded and the political party is presumed to be its owner, explained Association for Democratic Reforms (ADR), which is one of the organisations to file a petition against electoral bonds.

The scheme allows individuals, who are Indian citizens, and domestic companies to donate these bonds – issued in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore – to political parties of their choice. These bonds have to be redeemed by the political parties within 15 days, after which the authorised bank will deposit uncashed bonds to the Prime Minister’s National Relief Fund. A person can buy the bonds, either singly or jointly with other individuals.

There is no limit on the number of electoral bonds that a person (including corporate entities) can purchase.