Official sources said SCPPL had accepted a grant of USD 2.9 lakh from the Ford Foundation despite being a private company not having clearance from the Ministry of Home Affairs under the Foreign Contributions Regulation Act (FCRA).
This donation was, therefore, a serious violation of FCRA provisions, which mandate funding from a foreign source to only those recipients who have FCRA registration, they said.
The sources claimed the Home Ministry during its inspection of the company's accounts found that an amount of Rs 50 lakh was allegedly transferred to it by Setalvad's Sabrang Trust which also was in violation of FCRA norms.
The fund transfer from Ford Foundation, at present, has to be cleared by a nodal official in the Home Ministry. In April, the government had ordered that funds from the Ford Foundation should not be released by any bank to any Indian NGO without mandatory permission from the Home Ministry.
The Gujarat government and Setalvad are embroiled in legal battles. While she has filed several cases against the state government functionaries including the then chief minister Narendra Modi in connection with the communal riots of 2002, the state police has filed a case of embezzlement of funds against her.
Setalvad, in her statement earlier, had said that Sabrang Trust had co-operated with the Home Ministry team which visited its offices.
Her anticipatory bail plea is pending before the Supreme Court after the Gujarat High Court rejected her pre-arrest bail plea.