At least 20 companies bought poll bonds within three years of incorporation, violated law: Report

At least 20 companies violated the law by purchasing electoral bonds within three years of incorporation, The Hindu reported on Wednesday.

Section 182 of the Companies Act, 2013, bars companies that have been in existence for less than three financial years from directly or indirectly contributing money to political parties. The prohibition is meant to prevent shell companies from giving money to political parties.

The provision states that “every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months and with fine which may extend to five times the amount so contributed”.

Despite this, at least 20 companies purchased electoral bonds worth about Rs 103 crore between April 2021 to July 2023. Of these, the Bharat Rashtra Samithi encashed bonds worth 31.5 crore and the Bharatiya Janata Party encashed bonds worth Rs 26 crore, according to the analysis by The Hindu.

The Bharat Rashtra Samithi was in power in Telangana from 2014 to 2023 and is now the primary Opposition in the state. The Bharatiya Janata Party-led National Democratic Alliance is in power at the Centre.

Twelve of the 20 companies found to be in violations of the Companies Act by The Hindu are reportedly headquartered in Hyderabad. They purchased electoral bonds worth Rs 37.5 crore, of...

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