Firm facing ED probe in Rs. 400 cr fraud donated Rs. 100 cr to electoral trust, BJP biggest taker

Hyderabad: Future Gaming & Hotel Services, a leading player in the lottery industry and currently facing a probe under money laundering, donated Rs. 100 crore to electoral trust in 2020-21, revealed an analysis by the Association for Democratic Reforms.

A total of 31 corporate influencers donated to political parties via trust in 2020-21. While Future Gaming tops the list of white-collar funders, Haldia Energy Limited – a group company of the flagship RP Sanjiv Goenka Group – and Hyderabad-based Megha Engineering and Infrastructure Limited follow with Rs. 25 crore and Rs. 22 crore, respectively.

One of India's richest electoral trusts, Prudent (formerly Satya Electoral) based in New Delhi, received a whopping Rs. 245.72 crore political funding from corporate companies in the financial year 2020-21. To no one's surprise, the ruling Bharatiya Janata Party got a large share, Rs. 209 crore.

It is pertinent to note that Prudent has been one of BJP's biggest funders ever since it came to power in 2013-14. Compared to the 21 other trusts, Prudent receives over 90% of corporate-to-political parties donations.

Future Gaming & Hotel services fraud

This company is the sole distributor of 'Paper Lottery' organised by the states of Sikkim and Nagaland. Acting on a complaint filed by the Kolkata police, sleuths of the Enforcement Directorate took up a probe under money laundering. Investigation revealed that the company's promoters and its sub-distributors/area-distributors entered into a criminal conspiracy and illegally retained unsold lottery tickets and claimed top prizes on such unsold tickets in the pre-GST period up to 2017.

"Sale proceeds of lottery tickets have been illegally diverted towards gifts and incentives by modifying the prize structure of lottery schemes without any approval from the organising state governments. In this manner, Future Gaming and its sub-distributor companies illegally claimed around Rs. 400 crore between 2014 and 2017," ED said in a statement. On 2 April, ED attached properties worth Rs. 409.92 crore of the company.

Top donors from Hyderabad

Among the many donors who donated to electoral trust, three are from Hyderabad – Megha Engineering and Infrastructure Limited (donated Rs. 22 crore), new entrant KMV Projects (Rs. 1.5 crore), and GMR Airport Developers Limited (Rs. 1 crore). Notably, in the previous year 2019-20, NACTO pharma group, MNC Pharma and Hetero were among the top donors from Hyderabad.

To recall, the concept of electoral trust was introduced by the UPA government and what followed next was electoral bonds during the NDA rule. Professor Jagdeep Chhokar, a founding member of the Associate of Democratic Reforms, raised certain concerns regarding political funding. He said, "Corporate influencers donate in order to get back investments. They become part of a political party's favourable decisions and treatment. It is the corporate entity that decides whom to donate via trusts, bonds."

He added, "In foreign countries, companies donated to parties of the same ideology. However, the trend in India is different, it is a quid pro quo. Political parties are 100% exempted from income tax under section 13 (a). The funding received through trusts, bonds, individual contribution, and other investments goes untaxed. Over the years, it has been observed that establishments are donating during non-election years. The BJP has turned out to be the biggest gainer."

In addition, the funding for Indian National Congress (INC) has plunged significantly over the years. Between 2016-21, BJP received Rs. 860 crore from Prudent while the Congress received Rs. 96 crore.

In 2020-21, Prudent donated Rs. 209.00 crore to BJP compared to Rs. 217.75 crore it contributed in 2019-20. Jaybharath Electoral Trust donated Rs. 2 crore to BJP in 2020-21 and Small Donations Electoral Trust donated Rs. 3.31 crore to INC.