Electoral bonds: The curious case of Madanlal Ltd’s donations

Electoral bonds were intended to increase transparency in the funding of political parties. But as the data released last week shows, it fell well short of that target. Instead, it ended up potentially compromising corporate governance standards by enabling the flow of funds between companies through various kinds of financial arrangements—without limits and without adequate disclosures.

One such opaque arrangement involved the use of small, nondescript group companies as pass-throughs, as the case of Kolkata-based Madanlal Ltd shows.

Madanlal Ltd bought electoral bonds worth a total of ₹186 crore. Its website says it’s a part of the MKJ Group and Keventer Group. Two other companies of these groups—MKJ Enterprises and Keventer Foodpark Infra Ltd—separately bought electoral bonds worth ₹192 crore and ₹195 crore, respectively. Each of these three firms are among the top 10 buyers of electoral bonds, but none of their donations seem to be prudently aligned with their underlying businesses’ profits. Madanlal’s extent of disproportion is especially glaring—in 2021-22, its total income was just ₹3 crore.

Its annual reports don’t disclose where the money to buy electoral bonds came from; an email questionnaire sent to the company also remained unanswered. What is known is that Madanlal bought its bonds on 8 and 10 May 2019, right before the last two stages of the 2019 general elections—that saw voting for 118 seats, including 17 from West Bengal—took place on 12 May and 19 May.

A director of Madanlal is Radhe Shyam Khetan, who is also a director in MKJ Enterprises. Data from the Ministry of Corporate Affairs shows that through various companies, or directors therein, links can also be traced to the Keventer Group. With the