Vedanta’s Millions: Which political party benefited from it?
September 4, 2012
Although Vedanta’s annual report says that it cannot make donations to any political parties in the UK and Europe, it is different when it comes to India. Is foreign money approved and welcomed by all?
At its annual general meeting (AGM) on 28th August, the top brass of Vedanta Resources faced the now expected protests by a bunch of high-profile NGOs, including celebrity Bianca Jagger, over its environmental and human rights violations in India in Odisha and Goa. Approximately 12% of the shareholders even objected to the proposed hike in remuneration of top management. All this caused Vedanta’s share price to drop 8% in the week of the AGM but, strangely, nobody questioned Anil Agarwal about Vedanta’s political donations in India.
Just two days before the AGM, news agencies reported that Vedanta Resources had paid $5.69 million (about Rs28 crore) to political parties in India over the past three years. EAS Sarma, former secretary to the Government of India, has written to the chief election commissioner to investigate the beneficiaries of these ‘foreign funds’. He quotes from Vedanta’s annual report which says, “Neither Vedanta nor any of its subsidiary companies may, under any circumstances, make donations or contributions to political organisations within the United Kingdom or European Union.” If such donations are made in ‘exceptional circumstances’, it would require consent from the board of directors as well as the general body of shareholders. But it is different when it comes to India. The report says, “The Group made political donations in India of US$2.01 million… either through a trust or directly in respect of the Indian general elections. The Board believes that supporting the political process in India will encourage and strengthen the democratic process.”
Vedanta may be a foreign company, but Anil Agarwal, a quintessential Indian industrialist who had P Chidambaram as his lawyer and director, is unlikely to have made donations without a quid pro quo. Also, he would have spread his largesse across our raucous political parties, which is why there is complete silence over the donations, even though EAS Sarma says, “they fall foul of the Foreign Contributions (Regulation) Act, 1976. When it comes to money, there is clearly no party with a difference and this is one foreign hand that is apparently welcomed by all.”