FIR against Nirmala Sitharaman, BJP Karnataka chief for alleged extortion using electoral bonds

The Karnataka Police on Saturday filed a first information report against Union minister Nirmala Sitharaman and Bharatiya Janata Party’s state chief BY Vijayendra, among others, for allegedly misusing the electoral bond scheme to extort money from companies, The Hindu reported.

The first information report was filed based on directions from a Bengaluru court under the Indian Penal Code sections pertaining to punishment for extortion (384) and criminal conspiracy (120B), read with acts done with common intention (34).

The FIR also named senior BJP leader Nalin Kumar Kateel. Kateel was the party’s Karnataka chief between 2019 and 2023.

The directions of the 42 Additional Chief Judicial Magistrate in Bengaluru came on a private complaint by activist Adarsh R Iyer of non-governmental organisation Janaadhikaara Sangharsha Parishath.

Iyer claimed that Sitharaman and officials of the Enforcement Directorate connived with leaders and officer bearers of the BJP to commit “extortion under the guise and garb of electoral bonds and benefited to the tune of 8,000 and more crores of INR [Indian Rupees]”, Bar and Bench reported.

The complainant also claimed that Sitharaman, the Union finance minister, had used the central law enforcement agency to “conduct raids, seizures and arrests to compel the corporates to pay”, The Hindu reported.

The Enforcement Directorate reports to the finance ministry.

Fearing raids, several companies were forced to purchase electoral bonds, which were encashed by the Hindutva party, the newspaper quoted Iyer as having alleged. “The entire extortion racket under the garb of electoral bonds have been orchestrated in connivance with BJP officials at various levels,” he alleged.

The BJP has defended Sitharaman, saying that allegations against her are politically motivated and that the scheme was a policy matter, NDTV reported.

Electoral bonds were monetary instruments that citizens or corporate groups could purchase from the State Bank of India and give to a political party, which would then redeem them. The scheme was introduced by the BJP government in January 2018.

The process was anonymous as buyers were not required to declare their purchase of these interest-free bonds and political parties did not need to show the source of the money. The Centre, however, had access to information about the donors as it controls the State Bank of India.

The State Bank of India was authorised to issue and encash electoral bonds through authorised branches.

The scheme was struck down as unconstitutional by the Supreme Court on February 15 on the grounds that it violated voters’ right to information and could lead to quid pro quo arrangements between donors and political parties.

The Supreme Court had also directed the State Bank of India to publish details of the political parties that received electoral bonds from April 12, 2019, and submit them to the Election Commission. The poll panel had to make the data public.

An analysis of data revealed that the ruling BJP had received bulk of the donations made through the anonymous scheme.

The complainant had approached Tilak Nagar police station with a complaint on March 30 followed by the deputy commissioner of police for Bengaluru Southeast in April, the newspaper reported.

After no action was taken, he filed a private complaint in the special court, which deals with cases relating to legislators in Karnataka, seeking directions to the police.

In August, the Supreme Court refused to set up a Special Investigation Team to probe alleged instances of quid pro quo arrangements through the electoral bonds.

The court said it would be premature and inappropriate to do so when the ordinary methods of seeking legal recourse have not yet been invoked.

Read more analysis on this topic by Project Electoral Bond, a collaborative project involving Scroll, The News Minute, Newslaundry and freelance journalists.