The Supreme Court, in February 2024, struck down the scheme of electoral bonds introduced in January 2018, that helped to channel donations for funding the political parties, without any trail for the public to check.
In the course of striking down this arrangement, the Court mandated disclosure of the details by the State Bank of India (SBI), which managed the entire process. The details disclosed helped the media and the other agencies, clamouring for transparency, to link the donors with the political parties that received the funds.
As a consequence, the media highlighted many instances of potential and pernicious proximity between the contribution and some benefits received from the government in office.
The end of the electoral bond did not end the corporate funding of the political parties. The status quo ante was restored. Companies were, in the past, funding the political parties, either directly or through an electoral trust, allowed under the law.
The system has been revived, as brought out in a report by the Hindu Business Line (BL) dated 25 April 2025. One among such major contributors is a leading corporate group in Chennai.
Though the same information is available in the annual reports of the companies concerned, the BL report did help to look at this aspect in a different light.
Triumph Electoral Trust is a vehicle that the Murugappa group of Chennai has been using to channel donations to political parties by group companies.
The table below summarises the donations made since 2014-15 by different group entities through Triumph Electoral Trust.
The data may not be complete as the annual report of the trust for some of the years is not available.
Further, the direct contributions, if any, by the companies using the electoral bonds when it was legal, are not included in this data.
In FY23-24, too, some of the group companies gave donations to the trust, and the trust in turn channelised the funds to the political parties.
The data, extracted from the books of the trust, is reproduced here.
A fact that is patently observable is that the quantum of donations has taken a giant leap from the historical levels listed in the previous table. To place it in perspective, the combined profits of Tube Investments and its subsidiary, CG Power, were Rs1,186 crore and the total donation of Rs55 crore is at 5%.
In the list above, the highest contributor, Cholamandalam Finance, a non-banking finance company (NBFC), stands out, the rest being manufacturing companies.
In terms of some reports that appeared in the press a few months back, the group is presently structured with different families of the larger Murugappa clan having taken control of specific entities.
An extract from a report that appeared in Business Today, is given below.
Vellayan Subbiah is mentioned as the family member steering the three entities, Tube Investments, its subsidiary, CG Power, and Cholamandalam Finance.
These three entities made donations of Rs105 crore, being the lion’s share of the total by the group.
The manner of distribution of the amount collected by the electoral trust is shown below.
The three specified entities contributed Rs105 crore to the trust on 22 March 2025, and on the very same day, Rs100 crore was paid to Bharatiya Janata Party (BJP) and Rs5 crore to Dravida Munnetra Kazhagam (DMK).
Parallelly, some have linked in the media the donations made to the BJP, amounting to Rs100 crore by the three specified companies (overall Rs127.5 crore to the BJP), with CG Power receiving the necessary approvals from the government for its Rs7,600 crore semiconductor project coming up in Gujarat.
CG Power in its annual report for 2023-24, reported in detail about this project; this may be regarded as a major milestone for this group, which historically did not make such big investments and, that too, in a field unfamiliar to it.
Mr Subbiah, who heads this cluster and is leading the initiative to set up this project, had in various interactions with the media complimented the government for its speedy clearance of the project and issuing the necessary approvals.
The media reports linking the donation to the project’s clearance cite the proximity of the date of the approval and the date of making the donations.
Maybe connecting the two is unwarranted, as promoting the local manufacture of semiconductors has been the cornerstone of ‘Make in India’, and is receiving the attention at the highest levels of the government. The approvals may have been given speedily, given the amount of publicity made in this regard of inviting investments into this sector.
Hence, the idea of bringing up this subject in this article has little to do with which political party got the funds and for what. That is for the agencies that keep a watch on electoral practices to delve into. The concern this column highlights is only from the board governance angle.
It is fairly obvious that the Triumph Trust is used as a mere conduit for channelising the donations made by individual companies. It is quite easy to link the donation made by a specific company to a specific political party receiving it. The dates also match. Everything is done back to back.
The important issue to consider is that when the final recipient is known clearly, by interposing the trust, the company making the donation fails to record in its books, which political party it is intended for.
Even assuming that the board members are taken into confidence, privately, the governance suffers when ostensibly the board resolution is passed as if the donations would be distributed to multiple political parties by the trust.
The above, inside the red box, is extracted from the secretarial audit report of Coromandel International. It implies one or more of the political parties getting the funds. If a single party was intended as a final beneficiary, then, why use the trust and give it, back to back?
If multiple parties were intended as beneficiaries, did the directors seek that information, or check, post facto, if the amount was distributed among different parties?
Neither do the directors seem to have asserted their authority to decide the application of the donations, nor were they concerned at the lack of disclosure to the shareholders.
It is noticed that the secretarial audit report of the other companies makes no mention of the board approval, though the auditor is the same!
In terms of the disclosure in the books, the companies in the group follow differing practices.
CG Power and Coromandel International, mention the name of Triumph Trust. Cholamandalam (blue) and Tube Investments (black font), don’t reveal the name of the trust. The relevant notes are captured below.
Two of the companies audited by the same audit firm followed different disclosures!
Triumph Trust is not listed as a related party in any of the companies. There is little material to affirm or challenge this. Yet, to assume that the trust has an independent management that decides how to function looks very stretched.
It is quite improbable that some senior executives of the group companies, to the exclusion of the promoters, were deciding the donations. The trust as an idea was brought into the law in the hope that independent trusts would come into existence, managed by people of repute, with some level of neutrality, to aggregate donations from various companies or others to distribute the amounts collected to different political parties on a rational and non-partisan basis.
In practice, these trusts have mushroomed, set up by various large corporations, to mask the information from the shareholders (and equally the directors) of the destination of the donations.
The other anomaly that no one can miss is that, when street vendors operate digital payment, the Triumph Trust issues physical cheques to pay the political parties! Obviously, someone very high up in the system handed over the cheques physically to the right person on the other side, with some personal touch!
That may also be an expectation of the recipient, as some functionaries being a local leader may wish to boast of the collections he or she made from different donors to stay relevant in the party system!
Leaving aside the speculation about the motive behind the donations made by the Murugappa companies, the data raises questions on the aspect of corporate governance practised by these companies.
(Ranganathan V is a CA and CS. He has over 44 years of experience in the corporate sector and in consultancy. For 17 years, he worked as Director and Partner in Ernst & Young LLP and three years as a senior advisor post-retirement, handling the task of building the Chennai and Hyderabad practice of E&Y in tax and regulatory space. Currently, he serves as an independent director on the board of four companies.)
TI, Coromandel, Shanti Grears, EID Parry, Carborandum, Chola groups have each respected shareholder interest.