The decision could lead to a ban on Khan and his Pakistan Tehreek-e-Insaf (PTI) party, which rose to prominence on an anti-corruption drive.
Khan, who analysts say had fallen out with military powers over the appointment of a spy chief in the run up to his ouster earlier this year, was not immediately available for comment. A spokesman for the PTI party denied any wrongdoing.
The commission’s ruling is a major setback for the former cricket star who has been leading a campaign against the new government.
The case, filed in 2014 by Akbar S. Khan, a PTI founding member, accused the party of receiving illegal funds from abroad.
“The commission is satisfied that the contributions and donations have been received by the respondent party from prohibited sources,” the ruling, which has been seen by Reuters, said.
The commission said the party also hid 13 accounts, adding that the declaration submitted to the commission about the party finances by Khan as its chairman from 2008 to 2013 were “found to be grossly inaccurate.”
It said the PTI received funds from different people and companies abroad, including business tycoon Arif Naqvi, owner of a Dubai-based equity group, who is among several people charged by U.S. prosecutors with being part of an international scheme to defraud investors, including the Bill & Melinda Gates Foundation.
Naqvi has denied the charges.
The commission said the party was “willing recipient of prohibited money” amounting to $2.1 million from Naqvi’s Wootton Cricket Limited, which is registered in the Cayman Islands.
It also identified several other foreign accounts in the United States, Britain, Australia, UAE, Canada, Switzerland and other countries, which made transaction to Khan’s party accounts.
The election commission ruling has been referred to the Pakistan government, which could seek a Supreme Court ban on Khan and his party from politics, according to legal experts. The court ordered the commission in 2017 to scrutinise the party’s accounts.
“We will challenge this ruling,” Khan’s party spokesman, Fawad Chaudhry, told reporters. He said the funds were received from Pakistani nationals living overseas, which is not illegal.
Since then, he has been rallying his supporters to press his demand for a new election. Prime Minister Shehbaz Sharif has rejected that demand.
“It is a clear case of fraud,” said Shahid Khaqan Abbasi, leader of Sharif’s Pakistan Muslim League party.