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Unveiling the Veil: The Apex Court’s rejection of electoral bonds within framework of Corporate Governance and Companies Act

Non-disclosure of the particulars of contributions could only be a grave misprint on corporate governance. Corporate governance, at its core, includes transparency and accountability. In contrast, the anonymity that electoral bonds provide allows for opaque political funding and promotes a lack of accountability. This totally makes farce of India’s commitment to develop a robust accountable corporate sector.

Besides, this anonymity of the contributions could also result in the mismanagement and mishandling of a company’s assets, gravely affecting not only shareholder rights but also the operations of the company. Furthermore, non-disclosure of contributions in cases of public companies departs from the standards of fair play and business ethics, that stakeholders justifiably assume while placing their trust in a company. This further gives rise to legitimate concerns regarding mismanagement, which may have repercussions on the rights of various stakeholders.

Thus, the Electoral Bond Scheme has been fairly concluded to be arbitrary due to its discriminatory and non-transparent nature. The deletion of the 7.5% gap is rightly held to be in violation of provisions of the Constitution of India, making the Apex Court call for complete disclosure of contributions received by the political parties. Moreover, the scheme is not only a threat of non-abidance but also goes against the model of ‘Corporate Governance.’

The Apex Court has rightly canvassed that there is a lot of room for contribution to politics, but only when the lights are on!

Source: Barandbench

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