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Hemkunt Foundation, Rana Ayyub and Jignesh Mevani: How Covid-19 fundraisers could possibly be violating FCRA laws

YouTubers livestreamed and collected lakhs in donations for Hemkunt Foundation. It is unclear how much funds came from foreign donors.

Amidst the ongoing Covid-19 pandemic, there have been countless reports of patients needing oxygen support. Compared to the first wave, the second wave of the Covid-19 pandemic in India is almost three times stronger. The number of patients needing oxygen support increased dramatically in the month of April.

The sudden demand for oxygen support and ICU beds crumbled the Indian healthcare system, and for some time, there was a severe scarcity of medical oxygen in the country. The central government worked tirelessly to improve the supply of medical oxygen in the country and took several steps to ensure demand is matched as soon as possible.

From airlifting cryogenic tankers, converting industrial oxygen plants to medical oxygen plants, roping in steel and other industries, importing oxygen concentrators, installing oxygen plants at hospitals and running oxygen express trains, the central government has worked tirelessly with state governments to ensure supply becomes seamless as soon as possible. Fortunately, the supply has gotten much better since then.

Hoarding and black marketing

One of the significant issues that governments are facing is hoarding and black marketing on medical oxygen and life-saving medicines. The law enforcement agencies are working day and night to burst rackets involved in hoarding and black marketing of medical oxygen, oxygen concentrators and other life-saving machines or drugs.

Recently, several reports revealed that police in different states unearthed such rackets and recovered oxygen cylinders, oxygen concentrators and medicines hoarded by some miscreants. Some of them even had links with political parties. While some of them are caught, many issues still need to be addressed.

The curious case of NGOs, fundraisers and oxygen

There are countless NGOs and individuals working day and night to provide relief to the Covid-19 patients and their families. Some are providing free food and medicines. Some are helping in arranging ICU beds, some are helping in acquiring medical oxygen, and some are collecting funds for organizations to provide support to needy people. While OpIndia appreciates and thanks each and every organization that has come forward in the time of need, we believe that under the pretext of the pandemic, NGOs, individuals and organizations must not indulge in any activity that may go against the law.

Funds from foreign countries and FCRA regulations

Foreign Contribution (Regulation) Act or FCRA regulated the donations received by organizations and ensures that these funds do not adversely affect the internal security of the country. It was first enacted in 1976 and amended in 2010, in which many new measures were adopted to regulate foreign donations. It applies to all groups, NGOs and associations that want to receive funds from foreign donors. For NGOs, it is mandatory to register themselves under FCRA if they’re going to receive foreign funds.

Those organizations that are registered under FCRA can receive funds for social, educational, religious, economic and cultural purposes. It is mandatory to file annual returns. Notably, government officials, legislature and political parties, judges and media persons are not allowed to receive foreign funding. However, in 2017, the Ministry of Home Affairs made provisions via the Finance Bill that allowed Indian subsidiaries of foreign companies or foreign companies with Indian shareholder with 50% or more shares to donate to political parties.

If someone is not registered under FCRA, accepting foreign funding is by applying for prior permission. The government may grant such permission to receive a specific amount from a particular donor for carrying out specific projects or activities. Please note that the association accepting such funds must be registered under statutes such as the Societies Registration Act, 1860, the Indian Trusts Act, 1882, or Section 25 of the Companies Act, 1956.

If the Ministry of Home Affairs finds any irregularities or misuse of the foreign funds, it can suspend the FCRA registration initially for 180 days. During that period, the organization cannot receive any new donations. Also, it won’t be allowed to spend more than 25% of the available funds in FCRA account without the permission of MHA. If the organization fails to explain the queries put upfront by MHA, the FCRA license can be permanently suspended.

The government of India has issued a complete list of guidelines, process, Dos and don’ts about FCRA that can be accessed from its official website.

Strict guidelines in place for FCRA funds

One thing that every donor and organisation has to keep in mind that according to the latest amendments in FCRA, no person or organisation that has FCRA registration can donate funds collected from foreign donors to non-FCRA organisations. Also, it is mandatory to maintain different accounts for local and foreign donations.

Organisations cannot transfer funds from FC Bank account to Non-FC Bank account even if the accounts belong to the same organisation. The government has also advised not to make cash payments from FC account to ensure transparency in the expenditure of the funds received from foreign donors. The government of India has imposed a lot of restriction to bar non-FCRA organisations from receiving funds from FCRA organisations to ensure it does not harm the internal security of the nation.

Fundraising platforms and FCRA funds

A lot of organisations have created fundraising campaigns on websites like Ketto, DonateKart, Milaap, and others. These fundraising portals have their own guidelines for individuals and organisations creating campaigns on the respective websites. OpIndia scrolled through the FAQs, Terms of Use and Terms and Conditions of some of these websites to understand how they manage the funds received via foreign donors.

Ketto’s terms and conditions

According to the Terms published by the fundraising platform Ketto, it is the responsibility of the campaign organiser to obtain all necessary permissions for accepting donations from foreign donors. Ketto says it complies with the Anti-Money Laundering (AML) policy of the Government of India and requires organisations to submit several documents before a fundraiser can be started.

About FCRA under AML compliance, it says, “Recipients (campaign organisers, whether individuals or organisations) will comply with foreign exchange rules as explained by the Foreign Exchange Management Act of the RBI & FCRA guidelines. The recipient, if an individual or a non-government organisation, also understands that it needs to comply with FCRA guidelines by applying for an FCRA certificate and inform the Central Government in Form FC-1 within thirty days from the date of receipt of such contribution whenever applicable.”

Milaap’s terms and conditions

Milaap has a special note for NGOs in Terms of Use. It says, “You have to be registered/approved with FCRA to be able to receive foreign donations. Else foreign contributions will be restricted on your campaign.” It further added that in the case of contributions outside India, the campaigner must have the necessary permissions to receive such funds. “Such permissions include but are not limited to the Foreign Contributions Registration Act (FCRA), and others mandated by regulatory authorities.”

It also makes the campaigner solely responsible for utilising the funds for the purpose mentioned on the fundraising page. Milaap clearly says that it cannot be held responsible in any way towards the end utilisation of the funds. Based on FCRA regulations, it does not allow politicians, judges, news agencies and several other entities to raise funds on their platform.

DonateKart’s terms and conditions

Like Milaap and Ketto, DonateKart also has guidelines for campaign creators with respect to the FCRA regulations. DonateKart says that it is the responsibility of the campaign creators to comply with the provisions of FCRA and Prevention of Money Laundering Act, 2002 (PMLA). It also mandates the donor to disclose his/her nationality so that funds could be “directed to the applicable Trust which is registered under the provisions of India’s Foreign Contribution Regulation Act, 2010, as amended from time to time (FCRA).” DonateKart also does not allow politicians, judges, etc., to create campaigns as directed under the FCRA.

OpIndia has sent a questionnaire to all three mentioned fundraising platforms about non-FCRA registered organizations and what they do with the foreign funds collected under campaigns created by or for these organizations. We asked:

  • If they allow non-FCRA organizations to run campaigns to collect funds, including foreign funds.
  • What happens to foreign funds collected under such campaigns? Do they refund such donations?
  • If they forward the information of foreign funds collected under campaigns created by both FCRA or non-FCRA organizations to any government authorities?

By the time this report was published, none of them had replied to our mail. We will update this report when we receive a reply.

Are non-FCRA organizations accepting foreign donations?

As we have established that non-FCRA organizations are not allowed to accept foreign funds, and no one can donate them funds collected from foreign donors without permission from authorities, some organizations, including the fundraising platforms, need to answer some questions. In the last few days, we have come across a few fundraisers that may not have FCRA clearance.

First of all, let’s talk about Hemkunt Foundation. As claimed by the organization, it has been working in the field of social welfare for the last ten years. It has its headquarters in Gurugram, Haryana. Since the Covid-19 pandemic started, they have been among the most active organizations providing life-saving oxygen and other facilities to Covid-19 patients. There are several corporate houses, celebrities and YouTubers who have come forward to collect funds for Hemkunt Foundation.

After learning about their root-level work, we decided to dig a bit into the organization. Hemkunt is everywhere. They appear on news channels, news agencies are covering their work, celebrities and YouTubers are asking their followers to donate them, and they have fundraising campaigns on all the three platforms we have mentioned above. Apart from the donations they receive on their UPI IDs, Paytm account and in their bank account, here are the screenshots of some of the campaigns they are created and others created on their behalf to collect funds.

Donation by Realme

YouTubers livestreamed and collected lakhs in donations for Hemkunt Foundation. It is unclear how much funds came from foreign donors.

YouTubers donated 50 lakh. Excerpt from report on Gadget 360.

Now, what is noticeable here is that this organization has collected funds in crores. Out of these funds, a notable portion came from foreign donors, as seen in the screenshots below.

A portion of the list of donors on Milaap with foreign donations highlighted. There were many fundraisers raising funds for Hemkunt Foundation. This particular one had foreign donations. We could not find any fundraiser created directly by Hemkunt Foundation on Milaap.

Fundraiser created to donate funds to Hemkunt Foundation

A portion of the list of donors on DonateKart with foreign donations highlighted.

Screenshots of DonateKart fundraiser. Over 11 crore raised with several donations from foreign donors.

A portion of the list of donors on Ketto with foreign donations highlighted.

Screenshots of Ketto fundraiser. Over 8 crore raised with several donations from foreign donors.

If they are receiving foreign donations, they must be registered with FCRA. This is what we thought, but the case is different. Here is a report on Devex that mentioned ‘small’ NGOs like Hemkunt Foundation are facing difficulties as they are not allowed to receive foreign funds without FCRA. Also, the latest regulations have barred them from receiving help from FCRA registered organizations.

Excerpt from Devex mentioning Hemkunt does not have FCRA registration and it is causing problem for them

Hemkunt also replied to a few donors from its official handle that they are not registered with FCRA. These replies were made recently. The campaigns had been running before these replies were sent on Twitter.

Hemkunt Foundation replied that they do not have FCRA latest on April 25.

The government of India has a directory of NGOs registered in India. The majority of the NGOs have got their names included in the list as it is one of the conditions to apply for FCRA. When we tried to find Hemkunt on DARPAN, it was nowhere to find. There was only one NGO with the name Hemkunt in it and it was registered in Punjab. We may give them the benefit of the doubt that they might have not registered with Darpan yet but it has been ten years since they are doing welfare projects. It is unclear why they did not register themselves with Darpan.

Search result for Hemkunt on Darpan

We also could not find any details on how they have been using their donations. It is a norm for NGOs to publish their returns and FCRA returns on their websites. They can be accessed in the public domain, but Hemkunt Foundation has none of the returns in the public domain.

Tie up with United Way Bengaluru

We noticed that under every Ketto campaign in which the beneficiary is Hemkunt Foundation, a disclaimer says, “Hemkunt Foundation has tied up with United Way of Bengaluru to accept foreign donations on this campaign. The funds will be transferred to the vendor assigned by Hemkunt Foundation.”

However, when we talked to experts, they say that such disclaimers should not work as the regulations state that donations received by FCRA-registered organization cannot be transferred to any non-FCRA organization. In this case, the FCRA-registered organization may be held liable by the authorities for transferring/using funds for campaigns/projects of a non-FCRA organization. Notably, in many fundraisers the text used for the fundraiser was the same.

Excerpt from fundraiser where they put up disclaimer about tie up with United Way of Bengaluru

Violation of FCRA norms

In one of the fundraisers titled “India COVID-19 – MBAs Unite For India“, it says, “We hope to mobilize the generosity and empathy of the Dartmouth community across the world to bring together our student body, faculty, and alumni to support India and its people in this time of unspeakable fear, uncertainty, and loss. If you’re part of the Dartmouth family including Dartmouth parents, grandparents, and partners, we ask for you to please support our cause. Our hope is to raise $30,000 by May 20th 2021 but we believe every cent contributed will help save lives.”

It is safe to assume that the funds are being collected from foreign donors and how Hemkunt Foundation will get the funds without breaking the law is unclear.

Please note that we are not discouraging Hemkunt Foundation from doing any welfare work. Still, the way they are working raises some serious questions about them and the fundraising platforms, celebrities, and corporations that have extended financial support for them. We have messaged Hemkunt Foundation to explain their stand on foreign funds and links to access their annual returns. We will update our report with their reply as and when we receive it.

Also, please note that we took Hemkunt as a case study as it is one of the most prominent names in Covid-19 relief work that does not have FCRA certification. We would like to again emphasize the fact that we are not discouraging anyone from doing relief work in a time of need. However, we also believe that there must be clarity about the intentions.

Links with farmer protests and allegations raised by netizens

It has to be noted that Hemkunt Foundation was one of the main organizations after Khalsa Aid to be working at farmer protest sites at Delhi borders. They had set up a tent city for the protesting farmers. It is unclear if they are diverting funds collected for Covid-19 relief work to their other projects.

Details of work done by Hemkunt Foundation at farmer protest sites.. Source hemkuntfoundation.com

After cricketer Rishabh Pant announced that he would be donating to Hemkunt Foundation, a netizen who goes by the Twitter ID Defacto dug into Hemkunt Foundation’s link to Farmer Protests and detailed out how donating to such an organization could prove problematic. He shared screenshots of the tweets by Hemkunt Foundation and its members to show how much funds they had used for Farmer Protests. He said, “They provide everything at the border from WiFi, tents to literally every comforting thing.”

Defacto alleged that because many YouTubers and celebrities are double-minded in supporting farmer protests that went violent on Republic Day and had connections to anti-India organizations, they found a different route to support via Hemkunt Foundation’s Covid-19 relief.

Their direct support to Hemkunt has the potential to raise indirect support for the farmers’ protests. He said, “Why would suddenly so many people like Bhuvan Bam, Ashish Chanchlani, Rishabh Pant support this Hemkunt Foundation and not any other? Answer is simple. They want to show their support for Farmers protest but can’t say it openly. So voicing their support monetarily.”

On further digging, it was found that the organisation’s community development director, Harteerath is a Hindu hater and pro-farmer protests. On many occasions, he was found abusing PM Modi relentlessly on his social media profiles and often threw ‘bhakt’ jibe casually in his posts.

When several celebrities came forward to raise voice for India including Ajay Devgn, Sachin Tendulkar and Virat Kohli, Harteerath had abused them and called them “sell-brity”.

He was seen mocking the Holi festival. He also wanted the Indian Forces to kneel before so called “annadatas”.

Defacto alleged that it is possible that the funds that Hemkunt was using for farmer protests was drying up, so they came up with the plan to collect funds in the name of Covid relief. He further added that there is a possibility that Hemkunt will use only a part for Covid-19 relief work and divert the rest of the funds to farmer protests projects.

The point OpIndia has raised in questions sent to Hemkunt Foundations about its annual returns was echoed by Defecto as well. He said, “PM Cares has independent auditors. Audit report will be released at the end of financial year. But how can I check the audit report of these XYZ foundation. Who are the auditors?”

He also validly pointed out that people raise their voice when PM CARES is written on aid provided under the fund as it was collected through public donation, but they keep mum when Hemkunt Foundation does the same.

Towards the end, he shared two videos of Harteerath where he was demeaning Rakshabandhan.

We also noticed a video by influencer Yuvraj Pokharna on Instagram, who raised questions on the authenticity of Hemkunt Foundation. He said after learning about their good work, he called them to get oxygen. Their phone was switched off. Though the WhatsApp message was getting delivered, there was no response. However, if political or influential people approach them, they allegedly get instant response.

There are others who raised similar questions on their authenticity.

No reply on donation reciept.
Phone numbers are switched off
No reply on emails
Instant reply on donation tweets but no response to SOS tweets

Fundraiser by Jignesh Mevani

Another fundraiser that caught over attention was from Jignesh Mevani. We came across a detailed thread by Parixit on Twitter, who raised some serious questions on the authentication of Mevani’s fundraising program.

In his thread, Parixit said that he found multiple discrepancies in the campaign. First of all, he had appealed to global donors to donate to SetuCSKA, which is a registered organization with FCRA. So far, everything seems okay. However, there is a catch. Please note that as per FCRA regulations, politicians cannot collect FCRA funds.

The latest regulations do not allow the transfer of FCRA funds from FCRA-registered entity to non-FCRA registered entity. Unless they found a loophole, this whole fundraiser can come under the radar of the authorities as Jinesh has asked foreign donors to donate to a separate entity.

For the local donors, the donations are being directed to We The people Trust with the ‘self’ beneficiary type. By the time this report was published, he had already collected over Rs.19 lakh. His target is Rs.60 lakh.

Screenshot of Jinesh’s campaign

There were no details mentioned about ‘We The People’ on GoCrowdera or YouTube, so we investigated further to see if there is an organization by the name “We The People” with links to Jignesh Mevani. Neither Parixit nor us could find any organization with this name linked to Jignesh.

As per law, it is mandatory to register a Trust under Trusts Act, 1882 & I-T Act, 1961 Sec 12AB. Parixit mentioned that he could not find the organization on MCA, GUJ Charity Comm’ Trust Directory’ website & DARPAN. We also tried to search the organization on the said platforms but could not find any.

In the YouTube description, there was a name mentioned as “We The People Charitable Trust”, but there were no details of such an organization in the public domain. Parixit was able to spot one Delhi based organization with the same name, but the logo, founder, etc., details were different.

Another organization with a similar name is from Mumbai. But it has a different logo and other details as well. There was an organization with a similar name on Facebook, but that is being run by kids in Ranchi.

Another point that has to be noted that Jignesh mentioned the price of O2 concentrator as Rs.1.2 Lakh, which is almost double the price of concentrators in the market.

Parixit also contacted GoCrowdera that sometimes replied to organizations with “different names one original & one for projection purpose”, which makes the whole process even more questionable.

Screenshot of email shared by Parixit

The difference in names mentioned by Jignesh in the video and in the description makes one wonder about the legitimacy of the fundraiser. Some celebrities are endorsing the campaign, and they should also come forward to provide some explanation, said Parixit.

One thing that boggled us was that Jignesh mentioned he was suffering from Covid when he went to meet the Chief Secretary of Gujarat. There was a tweet on April 16 that he was tested positive for Covid. It is unclear if he was tested negative or not before he went to meet the Chief Secretary. If he had met him without completing his treatment and isolation, it was highly irresponsible behaviour and could have led to the further spread of the disease whereever he went.

Fundraiser by Rana Ayyub

Another campaign that caught our attention was by alleged journalist Rana Ayyub. First of all, we would like to draw your attention to the fact that according to FCRA regulations, journalists cannot collect foreign funds. Now, moving to the campaign created by her on Ketto. By the time we compiled this report, she has already collected over 89 lakh in donations. Her target is 1.25 crore.

Screenshot of fundraiser by Rana Ayyub

Coming to the beneficiary, in the campaign, she has mentioned “Daily Wage Workers”. This is not an NGO or an organization but regular wage workers. It is unclear how the funds will be transferred to them. She has uploaded photos and videos of herself doing some community work, but such a huge amount is hard to justify with a few photographs.

Parixit, who detailed out the fundraiser by Jignesh Mevani, also created a thread on Rana Ayyub. He posted a receipt by Ketto. It was clearly mentioned that the funds would go to a person’s account, and the donations are not eligible for a tax deduction that means there is no registered Trust or Organization. Still, Ayyub is accepting the funds in her personal account.

Another crucial fact is the number of donations coming from foreign donors. It is strictly against FCRA regulations to collect foreign contributions. The rule applies to both individuals and organizations. If Ayyub is collecting funds, she must either register an organization and get an FCRA certificate, or she must get prior permission from FCRA. As we have mentioned above, Ketto also mentioned journalists could not raise funds on its platform.

Now, there can be two aspects of the story. Either Ayyub lied about her credentials to Ketto, or Ketto broke FCRA norms. It is unclear who is responsible for allegedly breaking the law here. Maybe Rana Ayyub is NOT a journalist after all. Who knows?

Experts’ opinion on FCRA regulations and foreign fund collection by non-FCRA NGOs

OpIndia contacted a few experts to understand the FCRA regulations and foreign funds collected by non-FCRA NGOs. Vinay Murarka, founder of V2 Technosys, said that in such cases, the liability also falls on the fundraising platforms. As they have mentioned in their terms that the organizations are responsible for complying with the regulations, it is the duty of the fundraising platforms to ensure they send funds to either FCRA accounts or the organization whose name is in beneficiary or refund the donations.

We had a detailed discussion with Sandeep Kanoi, founder TaxGuru.in about the regulations. He said that writing a disclaimer that they have tied up with another organization to collect foreign funds is not the perfectly legal way to go ahead with donation collection. As the beneficiary here was Hemkunt Foundation, any other organization collecting funds and then paying forward to anyone for Hemkunt’s project is against the regulations.

Sandeep further added that the financial institutes share all data with the respective authorities, especially when the funds come from foreign contributors. Fundraiser platforms also have an obligation to share the details of funds received by any FCRA or non-FCRA organization.

A word of caution

There are a lot of other organizations and individuals collecting funds in the name of Covid-19 relief on fundraising platforms and social media platforms. OpIndia would like to caution everyone who wishes to donate to check the authenticity of the organization first. It is essential that you do not just go by the PR activities done by the organization but check yourself if the organization is authentic or not. If you come across any organization or individual that may be hoarding oxygen or medicines or collecting funds via illegitimate sources, please contact authorities.

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Anurag
B.Sc. Multimedia, a journalist by profession.

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