Trustees banned by regulator after paying themselves more than £320,000

Two former trustees of an international aid charity have been banned by the Charity Commission for 12 years each after the regulator concluded they had paid themselves £322,500 in unauthorised remuneration.

In its inquiry report on the Jole Rider Friends charity, which sent bicycles to Africa, the commission said today that it had contacted the charity on 26 August 2015 because the charity had only two trustees, Helen King and David Swettenham, and asked if a conflict-of-interest policy existed.

The commission received a response on 2 September that said the trustees had been paid £33,000 in remuneration and no formal conflict-of-interest policy had been adopted.

Both trustees had been paid unauthorised remuneration from the 2007/08 financial year despite this contravening a constitution voluntarily adopted by the same trustees in 2005, the report says.

By the time the commission’s statutory inquiry opened on 27 September 2017, the report says, King and Swettenham had received £322,500, equivalent to 23 per cent of the total income the charity had received during its lifespan.

The inquiry report says that the commission had "made clear on a number of occasions" that the payments to King and Swettenham were to cease, but the payments continued because, the trustees said, the charity would be unable to function otherwise.

The trustees also refused to make restitution for the payments they had received, the report says.

An action plan was issued by the commission on 21 September 2016, which gave the trustees a month to qualify the remuneration independently and propose a date by when the repayment would take place.

Three trustees were appointed on 27 January 2017, but all three had left the charity by 16 June 2017.

The inquiry was opened on 27 September 2017 and an order was issued by the regulator to restrict access to the charity’s bank account and credit card.

The Charity Commission says in its report that, without the order, both Swettenham and King would have continued taking payments from the charity despite knowing it was unlawful.

The inquiry found that the charity was insolvent and the trustees were "unwilling or unable" to provide a list of the charity’s creditors despite requests to do so.

The charity’s premises were vacated in May 2018, and a large number of bicycles were left behind and donated to a similar charity.

The commission says in the report that the charity had not undertaken any stock control and it was not possible to value the assets left behind by the trustees.

The commission says the charity was unable to prove that 13,697 bicycles had been sent to Africa except for an invoice showing the sale of bicycles to an individual for cash whom the trustees believed sent them to Ghana. The report says the regulator was unable to trace that person.

A number of county court proceedings had also been brought against the trustees by third parties for unpaid debts owed by the charity, according to the report.

The report says there had been serious misconduct and/or mismanagement at the charity and the trustees failed to comply in full with the regulator’s directions.

It adds: "The inquiry found that neither of the two trustees of the charity had grasped the significance and meaning of the statutory inquiry.

"Their fixation with identifying the ‘detractors’ of the charity diverted their attention from the three matters of concern, which were unauthorised remuneration paid to trustees, poor stock control and persistent default of statutory filing obligations."

Swettenham and King have been disqualified from acting as trustees or in senior management roles at charities for 12 years, the commission's report says. 

An interim manager was appointed pro bono on 4 January 2019, and the charity was wound up and removed from the register on 13 September 2019.

King and Swettenham declined to comment on the commission’s report.

Third Sector understands that the pair sent a letter to the Charity Commission last month taking issue with the report’s conclusions.

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