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October 3, 2019

SECP revokes licences of 22 entities for non-compliance

Business

October 3, 2019

ISLAMABAD: The government has revoked licences of 22 not-for profit organisations after they couldn’t comply with a legal obligation to submit their financial details to the authorities, a senior official said on Wednesday.

The official told The News that the government annulled licences under the Financial Action Task Force’s (FATF) action plan for regulating the non-profit organisations.

“The SECP (Securities and Exchange Commission of Pakistan) has very much tightened the regulatory framework for the companies under the FATF requirements,” the official said.

The official said the companies had to submit their details of quarterly returns, details of funding and their welfare work and beneficiaries under a section (42 (5)) of the Companies Act 2017, but “unfortunately they did not disclose their details to the SECP despite several notices, and resultantly the commission revoked their licences”.

The commission said the revocation of companies’ licences was made during the first quarter (July-Sept 2019/20). The number of revoked licences of the companies reached 319 by September-end, the SECP official said.

The official said FATF’s plenary meeting, scheduled from 13 to 18 October in Paris, would decide the fate of Pakistan – whether to keep the country on grey list, white list or black list. The global financial system’s watchdog enlisted the country in the grey list for not meeting the anti-money laundering and combating of terrorism financing standards.

The not-for-profit companies whose licences were revoked include 14 from Islamabad, four from Lahore, two from Karachi and one each from Multan and Sukkur.

Islamabad-based companies are Babar Foundation, AAP Ki Sehat, Takbeer Foundation, Visions and Actions, Polaris Leaders, Al-Mustafa Education Network, Center for Sustainability and Governance, Care Plus Welfare Organization, A. Hakim Siddiqui Foundation, Come Foundation, Radiant businessmen Forum, Gul Jan Welfare, MOH, Children’s Literate Festival and AKS Foundation.

Companies from Lahore are Polaris Leaders, Agrihealth Association, Hopian Foundation, Naymet Foundation. The SECP also revoked licences of Karachi-based Foundation for Faizan Aulia Pakistan and Malnutrition Care Foundation. The other two companies are Aas Development Foundation, Multan and Indus Crafts Foundation, Sukkur.

Though licences were revoked fornon-compliant of statutory requirements i.e. non-filing of financial statements and annual returns, some of them were dormant since incorporation.

The Federal Board of Revenue (FBR) has recently sought details from banks the details of trust funds, their accounts and accountholders who are involved in funds deposit and withdrawal from these accounts.

Official said the SECP, FBR and other agencies have made their regulations much stricter as the FATF asked for regulation of non-profit organisations, trusts and foundations and their financial matters and activities.

SECP, in a statement, said the companies have to follow the procedure for winding up voluntarily their operations and in case of having no assets and liabilities “they shall apply for striking their names off the register of the companies in terms of section 43 of the Companies Act 2017 read with the Associations with Charitable and Not for Profit Objects Regulations 2018”.

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