February 2: The Rs 20,000-crore Aditya Birla group today launched an election fund, consciously avoiding all the pitfalls that have made a similar effort of the Tata's a non-starter. The Birlas' newest baby - General Electoral Trust - will fund only those candidates and parties which are contesting from constituencies where the group's profit centres are based.Unlike the electoral trust set up by the Tata group, contribution to this trust will be restricted only to the A V Birla group companies, the second largest business group after the Tatas. The trust will also fund independent candidates, besides the EC-recognised political parties.
Elaborating, S K Saboo, Executive President of Grasim Industries, said the idea was to bring transparency into the corporate funding of political parties. ``All the disbursals would be made by cheque,'' he said, and added that no fixed formula for disbursal of funds had been finalised. ``Only an informal mechanism has been chalked out,'' Saboo said. While the bulk ofdonations were likely to come from the group majors like Grasim, Hindalco, Indian Rayon and Indo Gulf Fertilisers, the Trust would also accept contributions from other Aditya Birla group companies. The decision about the quantum of donations would be left to the discretion of the respective board of directors.
The Birla electoral fund comes closely on the heels of the Tata-initiated trust which is open to all companies seeking to fund political parties. As the response to the Tata trust was extremely poor, the Birlas, it seems, have decided to restrict the donations to the group companies.
Saboo said the electoral trust would be managed by an independent board based in Mumbai and would be assisted by an advisory board. The board of trustees comprises of former IPS officer Julio Ribeiro, former chairperson & MD of Exim Bank, Tarjani Vakil, and senior partner of Mulla & Mulla, E B Desai. The advisory board is headed by the former ChiefJjustice of India, Justice P N Bhagwati. The advisory board would alsohave nominees from the contributing companies.
The group has worked out a three-stage mechanism through which the quantum of funding and its disbursal pattern will be decided upon:
Managers will assess the quantum of funds that need to be disbursed, and the pattern of disbursal. A team of senior executives nominated to the advisory board of the trust will screen the proposals. The board of trustees will clear the proposals.The Aditya Birla group is spread over Madhya Pradesh, Gujarat, Rajasthan, Uttar Pradesh, Haryana, Kerala, Maharashtra, West Bengal, and Karnataka. The amount distributed will be revealed in group companies' annual reports, but no break-up will be provided.
The Tatas' trust launched late last year, on the other hand, seeks to fund only political parties and accepts contributions from any company. The Tata fund will disburse funds in two phases: first, before the elections on the basis of proportion of seats won in the previous Parliament, and in the second phaseafter the elections on the basis of percentage of seats won in the new Parliament.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
