Asian music station Radio XL was the subject of an inquiry by the commission in 2002, after it failed to release almost £30,000 that it had raised on behalf of Wolverhampton welfare charity the Divine Onkar Mission, which raises money for the relief of victims of an Indian cyclone.
Arun Bajaj, the station's managing director, told the commission that the delay occurred because of a misunderstanding and that the funds would soon be released. However, in 2005, the Divine Onkar Mission approached the regulator again because it still had not received the money, despite several promises by Bajaj to release it.
The charity said Bajaj had even handed over a presentation cheque for £21,000 at a fundraising event but had failed to honour it. It also said the station had broadcast further appeals on its behalf but had refused to reveal how the proceeds had been spent.
The commission opened a second inquiry in February 2006, which found that a total of £123,000 raised for various causes by Radio XL was still languishing in its bank account.
According to the commission's latest report, Bajaj put the delays in assigning the money down to his desire to make sure the projects for which it was earmarked were properly planned. It says he repeatedly refused to cooperate further with the inquiry, forcing the commission to freeze the bank accounts containing the funds as a protective measure. The commission's remit includes powers over charitable funds even when they have been raised by a non-charitable body.
Not all the money was raised for specific charities, so the commission also found a registered charity willing to use the money for its intended purpose. Radio XL finally released the funds late last year before the commission forcibly transferred them.
The commission's report says that, although the money had not been misused, Bajaj's failure to release it earlier was a form of mismanagement. It says people who manage charitable appeals have the legal duties of trustees and must form a registered charity if they fail to pass any funds raised to their intended recipients in good time.
Bajaj told Third Sector that the delays had occurred because he had reached agreements with Indian organisations to pay them only after work was completed. He said: “Raising money is easy. The hard bit is to make sure it is properly spent. When you are working with someone in India, how do you make sure the work gets done?”
He also said he was disappointed to be criticised by the commission. He said: “Radio XL has done a lot of good work over the years, raising nearly £400,000. Yet all the commission can do is find fault.”