The Charity Commission was right to open an inquiry into a Jewish charity that failed to file accounts after 2006 and made large payments to trustees, the charity tribunal has ruled.
On 23 October 2012, the commission decided to launch an enquiry into Regentford Ltd after concerns were raised about financial mismanagement.
The charity was notified of the decision on 1 March 2013 and appealed to the tribunal against the decision, saying that it was no longer a charity and that the activities took place between 2006 and 2007, before the Charities Act 2011 was introduced. The 2011 act gives the commission power to open such enquiries.
Regentford registered with the commission in 1991 and its objects, listed on the regulator’s website, include the advancement of religion in accordance with the orthodox Jewish faith.
The charity tribunal decision notice says that in 2007 eight flats owned by the charity were leased to Quain Ltd, a company owned by one of Regentford’s trustees, Anthony Markovic. The two directors of Quain – Markovic and Vashihan Ratnasingham – were both trustees of the charity, the tribunal decision notice said.
Quain then received a mortgage worth £950,000 on behalf of the charity to purchase the flats, which it subsequently sold at a loss for £400,000.
The commission also had concerns about "two large sums paid to two of the trustees" in 2006, which were discovered when the commission obtained copies of Regentford’s bank statements in 2012. The statements showed that £400,000 had not been accounted for in accounts filed with the commission, the tribunal decision said.
Judge Nicholas Warren, president of the first-tier tribunal, said in his decision notice that he supported the commission’s decision to open an enquiry into Regentford. "I cannot accept that there remains nothing to enquire about," his decision said. "In my judgment, even now, there has been no proper account of the trustees’ stewardship of charitable assets."
The decision notice said that in April 2010 Regentford was fined £250,000 at Croydon Crown Court after the death of a man who was doing building work on scaffolding at a building said to be owned by the company. After the ruling, Regentford was dissolved and removed from both the register of companies at Companies House – for failure to file accounts – and the commission’s register of charities.
In February 2011, Regentford was restored to the register of companies in order to conduct litigation in its name, and was subsequently restored to the register of charities in July 2011, the tribunal decision said.
When the commission decided to open its enquiry into the charity in October 2012, it had been communicating with the charity and its solicitors for 15 months. However, Markovic and Ratnasingham had resigned as trustees "leaving a single trustee who now describes herself as living abroad and possessing no records relating to the charity", the decision said.
Judge Warren rejected claims by the lawyer representing Regentford that the commission’s decision to launch an enquiry was "disproportionate". The tribunal decision notice said: "Informal approaches were going nowhere and use of the commission’s statutory power at this stage was, in my judgment, entirely appropriate."
Third Sector was unable to contact Regentford for comment.