An NGO run by civil rights activist Teesta Setalvad, who has espoused the cause of Gujarat riot victims, was on Thursday banned from receiving foreign funds, with the Home Ministry cancelling its FCRA licence.
The Home Ministry issued an order saying that the central government has cancelled the permanent registration of Sabrang Trust run by Teesta and her husband Javed Anand with immediate effect.
The government argued that the foreign funds received by the NGO under the Foreign Contribution Regulation Act (FCRA) licence had not been used for the purposes meant.
The order said that during inspection, the Home Ministry found that foreign contribution has been "frequently used" for items of "personal expenses e.g. for dining in hotels, food takeaways ordered at their residences, cakes and sweets from premium outlets, purchase of purely personal items like ear-buds, wet wipes, clippers, sanitary napkins by both Teesta and Anand, which have been reimbursed to the trustees from FCRA account."
Sabrang Trust has spent an amount of Rs 50 lakh for Sabrang Communications & Publishing Pvt Limited (SCPPL), of which Teesta and Anand are working as directors, co-editors, printers and publisher, "clearly violating the mandate of the FCRA," the MHA order said.
"By this action, the NGO has not only unauthorisedly utilised the foreign contribution for the purposes of an unregistered entity but also that entity being a self-owned media and publication company, utilised that amount for activities totally prohibited by FCRA," it added.
The order said the NGO had transferred an amount of Rs 2.46 lakh from its foreign contribution designated account to Sabrang Trust domestic account, thus mixing of domestic and foreign funds and violating the rules.
Sabrang Trust has made direct payments of approximately Rs 12 lakh from FCRA designated account to Citi Bank and Union Bank of India on account of credit cards belonging to Teesta and Anand respectively.
The cards are issued in the name of the individuals and the above payments of the foreign contribution shall be treated to have been used for personal gain, the Home Ministry said.
The MHA order said the NGO was given an opportunity for personal hearing but its response as well as the records made available by it were "not satisfactory" as the "same did not provide adequate explanation vis-a-vis the violations found."
"... In exercise of powers conferred by clauses (b),(c) and (d) of sub-section (1) of Section 14 of the Foreign Contribution (Regulation) Act 2010, the central government hereby cancels the permanent registration of Sabrang Trust with immediate effect," the order said.
Justifying the cancellation of the licence, the order said, "the association has incurred more than 50 per cent of the foreign contribution on administrative expenditure during 2010-11 (64.23 per cent) and 2011-12 (55.14 per cent) without obtaining the prior approval of the central government which is in violation of section 8(1)(b) of FCRA 2010."
The order said "it was noticed that Sabrang Trust has received Rs 1,52,593 as foreign contribution under the nature 'cultural'. Further, this amount has been reflected in Foreign Contribution-3 return in two different columns as Rs 1,02,593 under 'maintenance of place of historical and cultural importance' and Rs 50,000 under 'other expenses'.
"This indicated that the association has received the foreign contribution for purpose which is not permitted as per mandate of registration certificate and therefore, has violated the mandate of registration certificate."
It added that the NGO had "made payments to Sabrang Communications and Publishing Pvt Limited for purchase of bulk SMS from Sandesh Online Services" based in Goregaon, Mumbai.
"This action of the association is non utilisation of foreign contribution for the purpose for which it was received. Further, it constitutes transferring of foreign contribution to non-registered association engaged in media and publisations, which is prohibited activity under FCRA."
The MHA said Teesta and Anand run the Sabrang Communications & Publishing Pvt Limited (SCPPL) and publish a magazine called 'Communalism Combat'.
"It may be further mentioned that both entities are functioning from the same premises, utilising staff, infrastructure and other resources interchangeably. Thus, the association has violated Section 3 and 7, 8 (1)(a) of FCRA 2010...," the order said.
Before this action, the Home Ministry had in September last year suspended the FCRA licence of Sabrang Trust and barred it from receiving foreign funds without prior approval of the government.
Teesta has been pursuing the cases of the victims of post-Godhra riots in Gujarat when Narendra Modi was Chief Minister of the state.
Another NGO run by Teesta and Anand -- Citizens for Justice and Peace -- has already been put under prior permission category, thus making it mandatory for the organisation to take permission from the Home Ministry before accepting or utilising any foreign contribution.
Following a recommendation of the Home Ministry, CBI has already registered a case and launched a probe against Sabrang Communication and Publishing Pvt Limited for allegedly accepting and utilising foreign contribution in violation of FCRA.