45 per cent of CSR funding paid to activist as ‘consultation fee’ to avail funds

In a classic case of misuse of corporate social responsibility funds, a social activist is alleged to have been paid a whopping 45% of the total CSR fund received by a non-governmental organisation, K

Published: 15th July 2018 02:01 AM  |   Last Updated: 15th July 2018 06:36 AM   |  A+A-

Express News Service

BENGALURU:  In a classic case of misuse of corporate social responsibility funds, a social activist is alleged to have been paid a whopping 45% of the total CSR fund received by a non-governmental organisation, Karnataka Welfare Association for the Blind.In a complaint filed on April 5, 2018 by city-based advocate N P Amrutesh with the Sheshadripuram police – which registered the case – KWAB has paid `13,36,500 as “consultation fee” to social activist Pallavi Acharya to avail CSR funds from Dubai-based Etisalat Software Solutions Private Limited, which amounted to `33 lakh. KWAB paid Rs 13,36,500 after deducting TDS by cheque dated July 26, 2017, which is against the legal opinion given to KWAB.

After the matter was brought to his notice by some of the office-bearers of KWAB, advocate Amrutesh filed the complaint. The police registered an FIR on charges of cheating (IPC 420) and criminal act by several persons in furtherance of the common intention of all (Section 34 of IPC) against some office-bearers of KWAB too.According to the complaint, some officials of the KWAB – which is functioning since five decades in Seshadripuram – shared the “consultation fee” given to Acharya. The names of the accused mentioned in the FIR are Veerappa, Ramesh Kumar M H, Chandrashekar G V, Srinivasulu S, Dasharath N, N Manjunath, Sugurappa Mallappa, Rekha Y apart from Pallavi Acharya. 

KWAB is presently taking care of 100-120 visually-impaired students. The complainant has requested the police to consider it as a “sensitive case” as it involves visually-impaired persons who may lose their bread if the donors stopped funds in the light of the alleged misuse of CSR funds.

Acharya claimed she had returned the entire amount two-three days ago and hence, the issue was “sorted out”. But Sheshadripuram police said the case was pending for filing report and there was no information about money returned by Acharya.“We have written to the Registrar of Societies to know whether there is a provision to avail CSR funds for KWAB and pay such a huge consultation fee. After receiving the report, we will file a final report before court,” said a police officer, adding that all the accused were released on bail.

Manjunath N, then vice-president of KWAB, also an accused, admitted the consultation fee was paid, but insisted it was done with an eye on development the funds would bring. He said the matter was about to be settled as the fee paid was likely to be returned. Another accused K Veerappa said paying a consultation fee was not new as earlier too the institution has paid 44 per cent for a similar job. “We are innocent, and ourselves approached Pallavi Acharya.The consultation fee was paid through a cheque, after deducting TDS of `1,48,500. The issue has been taken to police station because of the ego of some members of (KWAB) governing council,” he said.

‘45% is very high’
In his legal opinion, sought by the association, advocate B M Arun opined that a service charge of 45% “very high”. It is not proper for the association to pay the said percentage or anything in excess of 10 to 15 per cent. Even for that amount, there has to be justification, he is said to have told the KWAB.

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