Charity tribunal rejects trustees' appeal against freezing of bank accounts

The Charity Commission had frozen the accounts of Jole Rider Friends after being alerted to concerns about potentially unauthorised payments and persistently late filing of accounts

The charity tribunal has rejected an appeal against an order by the Charity Commission to freeze the bank accounts of an educational charity that is the subject of a statutory inquiry.

The regulator said in October it had opened an inquiry into Jole Rider Friends, which provides facilities and equipment at educational establishments in Africa, because of concerns about potentially unauthorised payments and persistently late accounts.

David Swettenham, one of the charity’s two trustees, appealed to the charity tribunal last year against the commission’s order to freeze its bank accounts, and told a hearing earlier this month that the charity could be forced to close if the regulator’s order was not overturned.

The commission argued that Swettenham and the charity’s other trustee, Helen King, had been paid more than £200,000 in unauthorised payments and the protective orders were necessary to prevent further such expenditure.

The tribunal’s judgment, which was made last week, says Judge Alison McKenna concluded that the commission was right to say there had been misconduct and mismanagement in the administration of the charity.

"I am satisfied that the commission’s orders represent a proportionate response to the situation this charity is in, by preventing unauthorised expenditure but allowing for legitimate expenditure," the judgment says.

"Mr Swettenham has described operational difficulties in respect of the orders, but I conclude that these difficulties cannot properly be relied on as supporting a case for the orders to be quashed in circumstances where the statutory criteria for making the orders is satisfied."

The trustees of Jole Rider said in a statement they were very disappointed at the tribunal’s decision because they believed the justification for the orders made by the commission was flawed and based on "unsubstantiated allegations and a limited, inaccurate, desk-based analysis".

The statement said trustees agreed that they were guilty of misconduct and mismanagement only in respect of the late filing of annual accounts, which had since been lodged with the regulator.  

The statement said they believed the "true misconduct and mismanagement relevant to this case lies within the doors of the commission itself".

It said the charity’s trustees were also unconcerned about the ongoing inquiry by the commission or its eventual findings. 

Chris Willis Pickup, head of litigation at the regulator, said in a statement: "We are pleased that the tribunal has dismissed this appeal and concluded that our orders ‘represent a proportionate response to the situation this charity is in, by preventing unauthorised expenditure but allowing for legitimate expenditure’.

"We are also pleased that the tribunal has upheld our decision that there has been misconduct and/or mismanagement in the administration of the charity as a result of the unauthorised remuneration paid to the two current trustees, their failure to follow or engage with our action plan and their failure to file the charity’s statutory returns with us on time."

The regulator’s inquiry into the charity continues.

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