A charity has been banned by the Office of the Scottish Charity Regulator from transferring funds to another charity that bought a property on its behalf, after it failed to produce any proof that it would receive the property when payments were complete.
Darussalam, formerly known as the Al-Siddiqah Trust, became a charity in 2007 with objects to advance Islam in the Glasgow area and to advance education for Muslims. Its income in 2008 was £143,000.
The OSCR discovered that the premises occupied by Darussalam had been bought on its behalf by an unnamed charity because Darussalam was unable to afford the £277,000 asking price in 2008. Darussalam paid the other charity a deposit of £186,000 at the time and transferred another £51,000 subsequently, making a total of £237,000.
Darussalam's trustees said there was a legal agreement in place guaranteeing that the property's ownership would be transferred to Darussalam once it had paid the other charity the full cost price, but Darussalam's solicitor was unable to produce the agreement.
The OSCR concluded it was necessary to act to protect Darussalam's property and issued five orders preventing any more funds being transferred from Darussalam to the other charity, referred to in the OSCR's inquiry report only as Charity B, without the regulator's consent.
"The OSCR will consider revoking or varying this direction if the charity trustees of Darussalam can provide evidence of a legal agreement between the two charities which will secure Darussalam's interests," the inquiry report says.