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LATEST NEWS UPDATES | Election Commission seeks probe into FCRA 'violation' by Congress, BJP

Election Commission seeks probe into FCRA 'violation' by Congress, BJP

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published Published on Oct 17, 2012   modified Modified on Oct 17, 2012
-The Times of India

The Election Commission (EC) has asked the Union home ministry to probe the alleged violation of the Foreign Contribution Regulation Act (FCRA) by both the Congress and the BJP by receiving donations of about Rs 5 crore each from Vedanta Group subsidiaries — Sterlite Industries and Sesa Goa.

Nirvachan Sadan sources told TOI that the Representation of People Act (RPA) debarred political parties 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 and other people working in the important areas of national life like journalists, printers and publishers of newspapers among others."

"Since MHA is the nodal ministry for enforcing the FCRA, we wrote to the ministry a fortnight ago to look into the alleged donations by subsidiaries of the UK-based Vedanta group, which prima facie is a 'foreign source', and see if the Congress and the BJP have violated provisions of the FCRA," said a senior EC official.

It is only after the violation of the FCRA is conclusively established by the MHA that the EC plans to initiate action against the BJP and the Congress under the RPA as well, and both the parties could be served with show-cause notices.

The EC inquiry into donations received by the Congress and yhe BJP from Sterlite Industries and Sesa Goa was based on a recent report by the Association for Democratic Rights (ADR), an independent pressure group for electoral reforms, and a complaint filed by ex-revenue secretary-turned-civil rights activist E A S Sarma.

The ADR had, in its report released in September, 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."

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, agency reports said.

Vedanta Resources, according to its annual report of 2011-12, had paid $5.69 million (about Rs 28 crore) to political parties in India in the last three years.

Without disclosing the identity of the beneficiaries, billionaire Anil Agarwal-promoted Vedanta has stated on 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."

Vedanta, however, said the company believed that the provisions of FCRA do not get attracted to these contributions as they are not "foreign contributions" at all. "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," it added.

The Times of India, 17 October, 2012, http://timesofindia.indiatimes.com/india/Election-Commission-seeks-probe-into-FCRA-violation-by-Congress-BJP/articleshow/16843510.cms


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