The Ministry of Home affairs (MHA), which recently eased penalties on NGOs for violating Foreign contribution (regulation) Act, has started crackdown on private limited companies receiving foreign funds in violation of FCRA Act 2010.
The MHA, which has so far cancelled more than 18,000 licenses of NGOs for alleged violation of FCRA, in its recent investigation found that foreign donors have now changed their strategies and instead of giving donations to NGOs, they are routing money through private limited companies, mostly owned by the trusties of these NGOs or new entities, to carry on their activities without being noticed.
Investigation further revealed that in many cases several NGOs after receiving foreign donations, transferred this money to private limited companies in total violation of FCRA norms.
For example, activists Teesta Setalvad received Rs 2 crore in her private ltd company, Sabrang Communication and publishing private limited, in which she and her husband Javed Anand are directors. Teesta and her husband are facing criminal case against them and are out on bail.
Similarly, Advantage India of Deepak Talwar received Rs 5 crore in his company and he too is facing criminal case. Global Advisory Association Service private limited received Rs 1.75 crore in violation of FCRA norms. Rajendra Pratap Gupta and his wife Kopal Gupta are directors of the company. lawyers Collective received Rs 9 crore through foreign funding. Indira Jaisingh and her husband Anand Grover are directors on lawyers Collective.
The MHA has prepared an elaborate list of such companies and initiating action against them. A probe by the MHA against 21 top NGOs revealed alleged irregularities in their foreign contribution receipts. Prominent among them were Mary Kom’s boxing training school, Rajiv Gandhi Charitable Trust , Public Health Foundation of India (PHFI), Asianet New Charitable Trust, Waste Management Society, New Era Society, Yateem Khana and Madrasa, Amensty International (India) foundation, Center for social Development, etc.
The MHA, which has by an order on June 5, eases penalties on NGOs for violating FCRA norms said that for offence punishable under Section 37 for transferring foreign contribution to any other person in contravention of Section 7 of the Act, a penalty of Rs 1 lakh or 10 per cent of such of such transferred foreign contribution, whichever is higher will be paid. However no relaxation has been given to the companies receiving foreign fund in violation of FCRA norms.