NGOs on EU fraud buster list

NGOs on EU fraud buster list

CHARU SUDAN KASTURI

New Delhi, June 26: The European Union’s anti-fraud unit, OLAF, has
welcomed proposals made by the Planning Commission seeking to regulate
the functioning and funding of non-government organisations.

The Planning Commission recently submitted these suggestions to the
government in the form of a draft national paper, which is being
considered by the Centre.

In the past couple of years, OLAF has been monitoring several Indian
NGOs, which it believes could be involved in financial fraud worth
millions of euros in connection with grants made by the European Union.
It has been carrying out its investigations in India in tandem with the
Union home ministry.

Calling the proposals a positive move, OLAF said their implementation
would help eliminate illegal international transfer of donations by
NGOs. “While we cannot comment on any political implication of the
proposals, it is a very good move,” Joerge Wojahn of OLAF said over
phone from the organisation’

s headquarters in Brussels.

The Planning Commission’s recommendations suggest that all voluntary
organisations should compulsorily file with the government documents
relating to their constitution, composition, membership and financial
accounts.

Tighter administrative and penal procedures, which would help sieve out
illegal transfers from legal ones, have also been suggested.

A distinction between public utility organisations dependent on fees —
such as private schools and hospitals — and public benefit
organisations dependent on grants under the Income Tax Act has also
been drawn out in the paper to prevent tax evasion.

Recently, NGOs based in India have come under the EU’s scanner for
seeking to bypass the strict regulations of the Foreign Contribution
(Regulation) Act, 1976, which monitors the receipt of foreign
contribution in the country.

For instance, OLAF is examining allegations against the Delhi-based
South Asia Human Rights Documentation Centre, run by activist Ravi
Nair, for fraud of over half a million euros.

The centre had won a contract worth 428,760 euros in 2001 and,
subsequently, another worth 91, 200 euros from the EU for strengthening
human rights organisations in 13 Asian countries. It also bagged
contracts of £384,000 from the UK-based Department for International
Development in February 2003 and worth $150,000 from the Ford
Foundation in 2004.

However, the centre, registered as a public charitable trust, does not
have clearance under the Foreign Contribution (Regulation) Act,
required to transfer the grants to India.

Comments

Gopal Krishna said…
It would be correct to caution you that SAHRDC believes that these two newspaper articles are defamatory, to SAHRDC and to myself personally. SAHRDC has taken legal advice with regard to both these
articles, and has written to *The Telegraph* and *The Hindustan Times, demanding a published apology, and retraction of the articles in question.

We reserve the right to take legal action against the two newspapers in the absence of a satisfactory response. Further, SAHRDC has also been subject to an anonymous smear campaign in the last few weeks, wherein criminally intimidatory and defamatory e-mails have been sent to various organizations and individuals in the human rights community and the Indian media. SAHRDC has every reason to suspect that this campaign has been orchestrated by a former employee, against whom SAHRDC has commenced legal proceedings for
copyright infringement and misappropriation of data.

Ravi Nair
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