RSM places interim managers at charities under inquiry
22 Nov 2019
Karen Spears, director, and Steven Law, partner, of RSM Restructuring Advisory have been appointed as interim managers of two charities under investigation by the Charity Commission
22 Nov 2019
The regular has appointed them interim managers to manage the property and affairs at The Jalloh Charitable Trust and The Deacons Charitable Trust, both of which share connected trustees. The London-based charities aim to further general charitable purposes through grant-giving.
Statutory inquiries into the two charities opened earlier this year and were prompted by concerns about the trustees’ compliance with charity law, related party transactions and the management of conflicts of interest.
At the time, the regulator flagged concerns after discovering the trustees of The Jalloh Charitable Trust were also the trustees of The Deacons Charitable Trust, and that the two trustees are potentially related via marriage, highlighting apparent unmanageable conflicts of interest and calling into question whether key decisions have been made in the best interests of the charities or for the private benefit of the trustees.
The Commission reported serious concerns about the administration of The Jalloh Charitable Trust, which was previously included in a class inquiry due to its failure to submit annual accounting information.
Examination of the accounts revealed concerning transactions including the charity making loans of over £500,000 to a trustee and purchasing ‘a valuable collection of Judaica and other antique silver’ from a trustee.
A review of the accounts and bank statements of The Deacons Charitable Trust revealed a number of similar regulatory concerns, including loans to a trustee of over £150,000 and multiple payments totalling over £17,000, which the inquiry is concerned may have been spent on school fees for an individual connected to the trustees.
In its latest update, the Commission said the inquiries continue to have concerns about a number of serious regulatory issues at the charities, including substantial outstanding loans to a trustee.
As interim managers, Spears and Law will carry out their work to the exclusion of the trustees, in order to allow the charities to be properly managed.
Interim managers are appointed as a temporary and protective measure where the Commission has identified misconduct and/or mismanagement in the administration of a charity, or where there is a need to protect a charity’s property. The inquiries continue, and the Commission intends to report on its findings on conclusion.