It has been over a year since the EC first wrote to the Union home ministry, asking its foreigners' division to probe the alleged violation of Section 2 of the FCRA by both the Congress and the BJP by receiving donations of about Rs 5 crore each from Sterlite Industries and Sesa Goa — both subsidiaries of the UK-based Vedanta Group.
"We have sent several reminders since, the last being sometime in July this year. But we are yet to get a response from the home ministry," a senior EC official told TOI.
The EC is, prima facie, of the opinion that the Vedanta group is a "foreign source". Vedanta, however, maintains that the provisions of FCRA do not get attracted to these contributions as they are not "foreign contributions".
Under the Representation of People Act political parties are debarred from receiving contribution for a foreign source defined under clause (e) of the Section 2 of the FCRA, 1976. The FCRA, too, states that it has been formulated "to ensure that the foreign contribution and foreign hospitality is not utilized to affect or influence electoral politics, public servants, judges..."
The Commission had sought MHA's inputs on donations made by Vedanta to BJP and Congress to help it decide whether a show-cause notice should be issued to the two parties for having violated the RPA. The charges, if proved, could entail withdrawal of recognition to the party.
The EC inquiry was initiated on the basis of an Association for Democratic Rights (ADR) report released in September 2012, on funding structure of various parties and a complaint filed by ex-revenue secretary-turned-civil rights activist E A S Sarma. An investigation by the EC, assisted by the Income-Tax department, found that both Congress and BJP received about Rs 5 crore each from Sterlite Industries and Sesa Goa group.
The ADR report had said, "Sterlite Industries, a subsidiary of the Vedanta Group, has donated Rs 6 crore to Congress during FY05 and FY10 while the Madras Aluminium Co Ltd, also a subsidiary of the Vedanta Group, had contributed Rs 3.5 crore to BJP."
Vedanta Resources, according to its annual report of 2011-12, had paid $5.69 million (about Rs 28 crore) to political parties in India over the last three years. Without disclosing the identity of the beneficiaries, billionaire Anil Agarwal-promoted Vedanta stated in the report that it paid $2.01 million to political parties during 2011-12. A Vedanta spokesperson was quoted as saying, "We would like to confirm that all political donations made by Sterlite Industries India Ltd (SIIL) and Sesa Goa Ltd (Sesa) in specific years, were strictly in accordance with the provisions of Section 293A of the Indian Companies Act, 1956, after taking due approval of the respective Board of Directors and Audit committees and full disclosures have been made as per law.
"We have been legally advised that the FCRA provisions are not attracted in the background of present facts, to Indian companies incorporated as such and duly listed on domestic stock exchanges".
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