Chief Election Commissioner (CEC) Sikandar Sultan Raja on Wednesday directed the Election Commission of Pakistan's (ECP) staff to not list the case against PTI as that of foreign funding in the future after he accepted the PTI's stance the matter was about 'prohibited funding'.

The case, which was filed by Akbar S Babar, has been pending since Nov 14, 2014. Babar, who was a founding member of the PTI but is no longer associated with it, had alleged serious financial irregularities in the party's funding from Pakistan and abroad.

At the outset of the hearing today, PTI's counsel, Anwar Mansoor Khan, pointed out to the ECP that the cause list still referred to the case as that of foreign funding instead of 'prohibited funding'.

"My stance since the first day has been that this is a case of prohibited funding, not foreign funding," he said.

The chief election commissioner said Khan's stance was "correct" and directed the staff to not list the case as that of foreign funding.

Continuing his arguments from Tuesday, the PTI's counsel contended that the Political Parties Rules, 2002 would apply in a case related to 'prohibited funding', instead of the Elections Act, 2017. According to those rules, he added, money received from foreign governments, multinational corporations and local companies would count as foreign funding.

The lawyer noted as per the later Elections Act, receiving funds from any source other than Pakistani citizens was prohibited.

"The 2002 law applies to all cases till 2017," he added. "All sources of funding were not only shown to the scrutiny committee but proven as well."

For his part, the petitioner Akbar S. Babar's lawyer, Syed Ahmad Hassan Shah, argued that the law regarding foreign funding was clear.

However, Khan argued that if the case was related to foreign funding, the federal government could take action against the party and not the ECP. He added that the party had informed the Election Commission's scrutiny committee about all the facts and the PTI's stance.

"The scrutiny committee declared that the documents submitted by Akbar S. Babar were not verifiable after which he is no longer connected to the case," he argued.

The PTI counsel said the scrutiny committee could act only in accordance with the law and noted that it had declared it would only accept those parties that fulfilled its standard.

He informed the ECP that the PTI rejected the committee's report.

Subsequently, the PTI lawyer completed his arguments and the hearing was adjourned till June 20. The ECP is expected to allow the petitioner's lawyer to respond to the arguments of PTI spread over several weeks.

Meanwhile, PTI leader Farrukh Habib said the ECP had "accepted at last" that the case was related to prohibited funding, not foreign funding.

"According to the law, the party cannot be banned in a prohibited funding case. Therefore, immense damage has been caused to [PML-N Vice President] Maryam Nawaz, who gets easy load for Akbar Babar," he tweeted.

Scrutiny committee report

A damning report compiled by the scrutiny committee, which was released in January, noted that PTI received funding from foreign nationals and companies, under-reported funds and concealed dozens of its bank accounts.

The report, a copy of which is available with Dawn, also mentions a refusal by the party to divulge details of large transactions and the panel's helplessness to get details of PTI’s foreign accounts and the funds collected abroad.

According to the report, the party under-reported an amount of Rs312 million over a four-year period, between FY2009-10 and FY2012-13. Year-wise details show that an amount of over Rs145m was under-reported in FY2012-13 alone.

It also calls into question the certificate signed by PTI chairman Imran Khan, submitted along with the details of PTI's audited accounts.

The scrutiny committee was formed in March 2018 to completely scrutinise PTI accounts, but it took almost four years to present its report to the ECP, which was submitted in Dec 2021.