A charity run by the National Union of Students appears to have given up on recovering £2m it lent to a private company.
The NUS told Third Sector the software firm OneVoice Digital had “no immediate ability” to repay the loan, which was made in 2017 by its charity arm, NUS Students’ Union Charitable Services.
OneVoice Digital, which provides cloud-based membership management software and associated services, borrowed the cash when it was set up but the NUS declared the loan “irrecoverable” just two years later, NUS accounts show.
Documents filed with Companies House show that NUS Holdings Ltd transferred just over £2m to its charity arm’s subsidiary, NUS Services, in 2017.
NUS Services then lent £2m to OneVoice Digital as part of a deal that involved it taking a 20 per cent stake in the company.
NUS accounts for the year to the end of June 2020/21, filed with Companies House over the weekend, say that the loan is still being treated as in “full impairment”, meaning it is considered unlikely that any of the loan or interest owed on it can be repaid.
There was no deadline placed on the loan, which was supposed to be repaid with 2 per cent interest on top of the base rate of interest set by the Bank of England.
The NUS said this week: “NUS Holdings provided a £2m loan to set up OneVoice Digital in 2017, with a 20 per cent stake in the company.
“Given the context of the pandemic, NUS was advised by our auditors to impair the loan. Trading conditions show there is no immediate ability for the loan to be repaid.”
The latest NUS accounts also show that income fell sharply at NUS Students’ Union Charitable Services, from £3.7m in 2019/20 to £1.2m last year.
Income at the charity’s subsidiary NUS Services also fell, from £4.1m to £1.4m.
The charity’s full financial accounts for 2020/21 are due to be published next month.
The NUS said: “NUS Services’ income was impacted by the pandemic as a result of a reduction in demand for the products and services they offer. However, NUS Services remained profitable during this period.
“Overall, the NUS’ financial position has continued to improve. In the most recent management accounts [it] held £25m in assets with over £10m in cash.”
OneVoice Digital did not respond to a request for comment.