SECP issues notices to NGOs for filing account, returns

ISLAMABAD: The Security and Exchange Commission of Pakistan (SECP) has issued notices to 136 non governmental organisations (NGOs) for cancellation of their licences which have never filed anything before the regulator during the last five years.
In order to implement National Action Plan (NAP) to root out militancy and extremism, the SECP has tightened its noose to streamline rules and procedures for NGOs.
“There are 136 NOGs, which have not filed any account and return nor applied for extension or renewal of licences in previous five years. These are dormant companies and show-cause notices for revoking of licence issued to these NGOs,” official sources in the Ministry of Finance confirmed to The News here on Wednesday.
Currently, total 643 NGOs are registered with the SECP under Section 42 of Companies Ordinance 1984.
Out of these, 423 NGOs have completed 5 years period after being incorporated and were required to renew their licences under the law of the land.
Following the SECP issuance of circulator for necessary renewal of their licences, 161 NGOs applied for renewal of their licences so far.
Out of 423, there were 110 such NGOs, which have filed returns during 5 years but have not applied for renewal of their licences. The SECP has issued letters to such NGOs asking them to apply for renewal otherwise licence will be cancelled.
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.
The SECP had inserted certain clauses in 2008 binding the NGOs to renew their licences after five years in 2013 but mostly 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 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 the section 42 (2) of the said law gives the 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.
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.