CITU demands probe into Vedanta donations

The CPI(M)-backed trade union Centre for Indian Trade Unions (CITU) today demanded an inquiry into political donations to the tune of $2.5 million to Indian political parties and individuals by Anil Agarwal-controlled Vedanta Resources, which controls 51 per cent stake in erstwhile PSU Balco through Sterlite.

In a letter to Prime Minister Manmohan Singh on Thursday, CITU president MK Pandhe cited the annual report of Vedanta, according to which the Group contributed $1.2 million in 2004 and $1.3 million in 2005 to the Political and Awareness Trust, which made political donations in India.

"The trust is controlled by Agarwal family. Since the company is listed with the London Stock Exchange, in what capacity was it contributing to political parties in India? It is in violation of the law of the land. Who are the beneficiary political parties and individuals? We have written to the PM demanding an inquiry into it. Since foreign money has to come through RBI, we are going to approach the RBI as well," Pandhe and CITU secretary Dipankar Mukherjee said at a press conference here today.

Vedanta Resources, however, denied the allegations saying that the contributions to the trust were made by Sterlite, registered in Tuticorn, Chennai, and not by UK-registered Vedanta Resources. Sterlite is a subsidiary of Vedanta Resources. The Political and Awareness Trust is registered in India and managed by its independent trustees.

A member of the Agarwal family is among the trustees, but Anil Agarwal is not one of the trustees. "The trust follows highly stringent and ethical norms in its activities, subject to the Indian Trust Act," a spokesman of the Vedanta Resources said in a statement.

"Every major corporate house today makes political donations in a similar fashion. This is nothing out of the ordinary. In fact, contributions from corporate bodies in a legitimate and transparent manner have cleaned the system to a fairly large degree," said the statement.