600 NGOs licences being confirmed to curb terror funding

ISLAMABAD: In order to implement the National Action Plan to root out the menace of terrorism, the Securities and Exchange Commission of Pakistan (SECP) has decided to re-validate the licences of hundreds of Non-Governmental Organizations (NGOs) to curb terrorist financing.
“Yes, the SECP has decided to confirm the licences of over 600 NGOs registered under Section 42 of Companies Ordinance 1984,” official sources in the Ministry of Finance confirmed to The News here on Wednesday night.
The SECP, the sources said, started issuing 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 a 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 most NGOs did not comply with the instructions of the regulator.
Federal Minister for Finance Senator Ishaq Dar chaired a meeting of the sub-committee formed by the prime minister to recommend ways and means to choke the financial sources used by the terrorist organizations this week. It was observed in the meeting of the sub-committee that proper legislation was required to regulate and monitor INGOs working in Pakistan.
The SECP, in its meeting, noted that the Commission 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 organization.
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 registered not for profit organization under Section 42 of the Companies Ordinance and grant them licence for a definite period of five year. Under Section 42, not for profit 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 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.