How little-known companies in Kolkata donated 300 times their profit to Mamata's TMC

53A, Mirza Ghalib Street, 4th Floor, Kolkata. This address houses 19 private unlisted companies -- from a steel manufacturer to a saree trader, and from real estate firms to financial services firms. Twelve of these companies bought electoral bonds worth around Rs 64 crore, according to data released by the Election Commission. When the alphanumeric codes of their bonds were checked, the money went to Mamata Banerjee's Trinamool Congress (TMC), which is running the government in West Bengal. TMC, with a limited presence outside West Bengal, is the second biggest beneficiary of the now-scrapped electoral bonds, cornering Rs 1,609.53 or 13% of the corporate funding. The Congress, a pan-India party, got Rs 1,411 or 11%.

The numero uno party BJP got Rs 6,072 crore or 48% of the total funding.
The companies on Mirza Ghalib Street funding India's electoral politics are a curious case. These entities have common directors and a ghost-like lack of digital footprint. Many of them do not report their financials to the Registrar of Companies. Those who do stretch themselves up to 300 times their net profit to donate to TMC.

They rode on the 2017 Finance Act which removed the cap on companies donating to political parties. The BJP-led Union government amended Section 182 (1) of the Companies Act which capped corporate donations to political parties at 7.5% of the average profit of the preceding three years. The amendment allowed companies to legally donate to political parties, irrespective of their financial health.

When the Supreme Court of India struck down the Election Bond Scheme as unconstitutional and scrapped it on February 15, it also observed that the removal of limitation was "manifest arbitrariness".

The arbitrariness helped Ritesh Vanijya Private Limited, on Mirza Ghalib Street, buy electoral bonds worth Rs 45 crore. It is listed as a financial services company. A review of documents by Onmanorama showed Ritesh Vanijya has not uploaded its profit and loss (P&L) statement in recent years.

Om Enclave Private Limited, which bought bonds worth Rs 4.3 crore in October 2021, reported a net profit of only Rs 1.36 lakh that year. That is, its donations to political parties were 316 times more than its net profit. Since March 2014, Om Enclave's cumulative losses stood at Rs 10,383, according to the statement filed with RoC, Kolkata. Take the case of another entity Om Vincom Pvt Ltd, which bought bonds worth Rs 60 lakh in July 2021. In March 2021, it reported a net profit of only Rs 2.22 lakh, which was a 44% dip from the year before. Its donations were 27 times more than its net profit for that year. The entity's cumulative profit for the preceding eight years comes to only Rs 16 lakh.

Salasar Sarees Private Limited bought bonds worth Rs 5 crore. Ritesh Nirman Private Limited bought bonds worth Rs 5.35 crore. The list goes on. To put their combined donations of Rs 64 crore in perspective, K Raheja Group, India's premier real estate company, donated only Rs 60.75 crore, through four companies.

There are many cases of companies buying electoral bonds after central agencies knock on their doors. But the Mirza Ghalib Street companies were never on the radar of any agencies but channelled all their money to one party. There is little doubt from the P&L statements of these companies that they did not donate their own money to TMC, said a financial adviser from Kolkata. "There are many corporate entities in the Bara Bazar area of Kolkata which offer their services to launder money for a commission," he said.

Mails sent to the companies on Mirza Ghalib Street asking for the source of their donations did not elicit a response. The landline numbers mentioned on company documents turned out to be dead.

A chartered accountant in Thiruvananthapuram who saw these companies' documents accessed by Onmanorama said these companies appeared to be "paper companies". "But political parties can also use these firms and electoral bonds to route unaccounted-for money to their bank accounts," he said. He said that the removal of the cap brought alive unhealthy and dormant companies that were used to transfer money to political parties. "And the money raised was obscenely huge, making a mockery of democracy," he said.

Candidates contesting in Lok Sabha constituencies can spend only up to Rs 70 lakh or Rs 95 lakh, depending on the state. And for assembly seats, candidate spendings are capped at Rs 28 lakh and Rs 40 lakh. Given the cap, Rs 12,000 crore is enough to meet the expenditure of more than three candidates in all 4,126 legislative Assembly seats and 543 Lok Sabha seats, he said. "And Electoral Bond was just one source of funding," he said.