Charity which gave out £75m in loans had trustee powers removed by Charity Commission
A charity which gave out loans of £75m and spent only 13 per cent of its £18.9m income on charitable activity is still under inquiry by the Charity Commission after trustees had their powers removed by the regulator in 2010.
The charity, Delapage, was brought to light in a Mirror investigation today but it came to the Charity Commission’s attention in 2009. Shortly afterwards the Charity Commission started an inquiry into the organisation which is still underway today. The charity's charitable objective is the advancement of the Orthodox Jewish faith.
A spokesman for the Charity Commission said: “The concerns under investigation relate to high levels of reserves, low levels of charitable expenditure and unsecured loans being made to the private companies of two of the charity’s trustees.”
In 2010, the Charity Commission appointed Rod Weston of Mazars as interim manager of Delapage and took away all management and administrative power from the charity’s two trustees Joseph Ackerman and Sally Glassman.
Weston told civilsociety.co.uk that the charity was still active and he was involved in looking at a “complex state of affairs which would take a long time to unravel”.
According to these accounts, the charity had voluntary income of £2.8m, mostly generated from gift aid from its subsidiaries Haysport Properties and Twinsectra. It experienced a 78.4 per cent drop in voluntary income compared with the previous year when it received £12.5m in gift aid from its subsidiaires.
The charity also made £7.6m from rental income and £8.6m from investment income in the year to 31 March 2008.
But in the same year it only spent 13 per cent of its total income of £19m on its charitable activities comprising of £2.5m in grants to institutions.
Some £11.8m was spent on 'investment expenses' by the charity.
During the same period, the charity advanced £74.9m in loans to what its accounts call “connected companies”.
Its accounts also advise that it has made a £4.9m provision for a ‘doubtful debt’ – money owed which it may not get back.
Commenting on the Charity Commission inquiry, a spokeswoman said: “Following extensive engagement with the trustees the investigation was escalated to a statutory inquiry under section 8 of the Charities Act 1993 on 3 September 2010.
“Because this inquiry remains open we are not currently in a position to go into further detail. However, we intend, as is normal procedure, to publish a statement of the results of the inquiry setting out our findings once the inquiry is completed.”
Depalage has been running since 1978. There are no other employees of the charity other than the trustees and two executive directors – J Ackerman and N Ackerman.
This article was taken from Civil Society – http://www.civilsociety.co.uk/governance/news/content/14639