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A London daily on Saturday published damning evidence of prominent UK-based Muslim businessmen using bogus charities to funnel millions of pounds to seminaries alleged to produce as many gunmen as they do clerics.
The report in The Times was based on the conclusions of an investigation by the Brussels-based International Crisis Group (ICG), a private, multinational organisation, working to prevent and contain conflict.
The ICG has learnt that madrassas or Islamic seminaries in Pakistan, receive more than 800 million pounds a year - equivalent to the country's income tax collections -- through charitable donations mainly from wealthy UK-based Muslim businessmen, the report said.
A large number of these madrassas are controlled by fundamentalistic Islamic militant organisations fighting in Jammu and Kashmir, it said.
The report said that India had sent a Central Bureau of Investigation team in July, offering Scotland Yard evidence against 14 businessmen in Britain, who are funnelling cash to Islamic seminaries and terrorist groups.
Authorities in the UK are investigating at least three groups named by the CBI, it said.
One of the suspects is London-based nuclear scientist and expatriate Kashmiri leader Dr Ayub Thakur, whose charity 'Mercy Universal' is among those being investigated, said the report.
However, Dr Thakur claims he has 'no connection with Kashmiri militants and has documents to prove all the money he raised is sent to charitable projects', the report said.
According to the ICG, clerics of some madrassas are reluctant to open their books for scrutiny, the report said.
Though the madrassas claim to teach Islamic theology, critics accuse them of producing thousands of jihadis (religious warriors) who took part in the war in Afghanistan and militancy in Chechnya and Kashmir, the paper said.
Western governments, including UK, are putting pressure on President Gen Pervez Musharraf to regulate the estimated 10,000 madrassas in Pakistan.
However, Musharraf's efforts to introduce science and mathematics in the course of the seminaries has met with stiff opposition from religious leaders, the report said.
The clerics who run the madrassas, many of whom fought the Soviet forces in Afghanistan in the 1980s, say they do not depend on government patronage because charities provide ample money, it said.
ICG dismissed the proposed reforms of madrassas as lacking substance, legal muscle or an intent to institutionalise long-term change because the Musharraf government is reluctant to antagonise the clergy, it said.
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