The trustees of a charity with a turnover of over £1m have been suspended and its assets frozen after the Scottish charities watchdog launched an investigation into alleged mismanagement.
Scotia Aid Sierra Leone, based in Uddingston, claims to help children in the war-torn African country gain an education and healthcare. But it has been accused of spending just 17p of every pound raised on charitable causes, while leading figures pocketed “consultancy” fees totalling hundreds of thousands of pounds.
The Office of the Scottish Charity Regulator (OSCR) said it was also looking into claims the charity had wrongly sought charitable rates relief on properties left empty, to save the companies which let them substantial business rates. The businesses involved then donated sums to the charity in return.
Councils affected by the loss of rates involved in the dubious fund-raising technique are thought to have included Glasgow, South Lanarkshire, North Lanarkshire and Fife, as well as several in England.
Scotia Aid, founded in 2010, has now had its bank account frozen, its two trustees have been suspended from controlling the charity and an interdict has been granted preventing it from selling or leasing any of its property.
The Court of Session granted the measures last Friday and also approved the appointment of an Interim Judicial Factor to manage the charity’s affairs.
OSCR’s head of enforcement Laura Anderson said that action was necessary to protect the charity’s assets and reinforce public confidence. She said an investigation had been launched after the regulator was contacted by a number of councils north and south of the border.
OSCR said the charity had entered into numerous leases with landlords to help them dodge full business rates, which are due on any commercial premises that remain unoccupied for three months or more.
Councils offer a mandatory 80 per cent discount on business rates for properties used wholly or mainly for charitable purposes, and some grant the remaining 20 per cent as a discretionary discount.
Scotia Aid would claim the property was being used to store furniture and other supplies prior to shipping to Africa but OSCR said councils claimed many of the premises were never used, and instead left empty in return for donations from the landlords.
In 2014 the accounts of Scotia Aid Sierra Leone showed that nearly 90 per cent of its income was related to property, with more than two dozen landlords and businesses paying it £867,017.
Accounts submitted in 2014 showed an income of £1,020, 365 and spending of £1,017, 771 with the charity claiming £509,000 had been spent on further fundraising and £508,000 spent on charitable activities.
The charity watchdog is also looking into a contract between Scotia Aid and Italian charity FHM Italia Onlus to build a clinic in the coastal resort town of Lakka, Sierra Leone. The charity’s website says the clinic will help vulnerable, abused and neglected children and single mothers.
But in a statement OSCR said “FHM Italia Onlus transferred significant sums of money to Scotia Aid Sierra Leone, for which Scotia Aid Sierra Leone has failed to account properly. In addition we identified significant payments made by the charity to consultancy companies that were connected with one or more of the current and /or former charity trustees. These payments appear to be excessive and have not been sufficiently explained.”
Ms Anderson added: “Our experience is that charities in Scotland are generally well-run and we remain committed to supporting and encouraging those running them to meet their legal duties.
“But this case shows that where we identify sufficient cause for concern, we will take action – including Court action – to ensure that the public’s confidence in charities and their work is maintained.”
A Glasgow City Council spokesman said Scotia Aid had previously claimed rates relief in several locations since 2011: “Following an investigation in 2015, business rates relief was withdrawn from a number of properties in Glasgow,” he said.
Until recently the charity was a sponsor of Hamilton Academicals FC. A spokesman said: “The Club made the decision to sever ties with Scotia Aid due to negative allegations coming to light, and the charity not fulfilling their financial obligations to us.”
Police Scotland said there was currently no active investigation into the charity.
Attempts to contact the charity by calling its registered number were unsuccessful last night as it appeared to have been disconnected.
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