SECP extends date for renewal of NGOs’ licences

ISLAMABAD: Only 10 percent of Non-Governmental Organisations (NGOs) have applied following the the government instructions to get their licences renewed by the Security Exchange Commission of Pakistan (SECP), forcing the regulator to extend the deadline to February 16, 2015.
There are 647 registered NGOs working all over the country under section 42 of Companies Ordinance 1984. Of these 403 were bound to get renewed licences after lapse of five years period.
“So far now only 43 NGOs have applied for renewal of licences out of total 403,” official sources confirmed to The News here on Thursday. The decision of granting extension was taken by the SECP at the request of many relevant stakeholders. The SECP has made it clear that no further extension will be made those NGOs which do not get their licences renewed will lose them.
The SECP vide its circular No 29/2008 of December 24, 2008 had detailed the requirements for making application for renewal of the licence. Accordingly, all the non-profit associations, which obtained their licences before January 1, 2010, have now again been directed to apply to the SECP for renewal of their licence by February 16 positively.
The SECP had issued notices to all registered NGOs, as most of them did not comply with the rules to submit audited accounts and get renewal of their licences after lapse of five years. It had inserted certain clauses in 2008 binding the NGOs to renew their licences after five years in 2013 but most NGOs did not comply with the instruction of the regulator.
The government had placed certain conditions for NGOs but a number of these companies are either not complying with the conditions imposed under the licence or are not complying with legal requirements under the law, such as filing of annual returns with the registrar, submission of annual audited accounts and annual report of the working of the organisation.
Official sources said that section 42 (2) of the said law gives Commission vested powers to impose such conditions while granting the licence as it may deem fit and under which it can revoke licence of such companies for the stated defaults.
The SECP registers non-profit organisations under Section 42 of the Companies Ordinance and grants them licence for a definite period of five year. Under Section 42, such companies are required to submit an application for the renewal of their licence along with copies of annual audited accounts, complete profiles of chief executive and directors, statement of work, details of the amount of donations and grants received, statement from chartered accountant that funds/grants/donations were received through banking channels and details of donors.
However, it has been observed that majority of these companies have not submitted applications for renewal of their licences, under which the SECP has already served notices to do needful.
According to sources, in the process of revalidation, the SECP officials would review/audit the previous submissions of the Section 42 companies which may include annual statement of accounts, audit reports, statement of works etc. The Commission has the powers to order special audits and on-site inspection of accounts of the Section 42 companies.
The directors of the Section 42 Company also submit an affidavit that the directors have not been associated with any illegal banking business, deposit taking or financial dealings. And, the funds raised shall be spent for objects of the proposed association and for lawful purposes.