A SCANDAL-hit Scottish charity that claimed to help impoverished African children has gone bust with debts of more than £1 million.

Scotia Aid Sierra Leone became mired in allegations of serious financial misconduct after it emerged that only 13p of every £1 it raised went to good causes.

It had its assets frozen by the Office of the Scottish Charity Regulator (OSCR) last July amid claims its premises were being used to enter into lucrative property deals and two of its trustees, Kieran Kelly and Alan Johnston were barred from running any charity for life.

Regulators acted after accounts showed more than £1million in donations were brought in but only £137,000 was donated to the needy, while the lion’s share of cash was paid in consultancy fees to a small number of staff.

Now it has emerged the charity applied for bankruptcy earlier this month after running up debts of £1,107,800. Scotia Aid declared that its total assets are worth just £2,348. The application was approved by the Accountant in Bankruptcy, Scotland’s insolvency service.

The Herald:

The move came after OSCR won a court order to have Emma Porter, of Aver chartered accountants, put in charge of the charity while investigations continue. She has been appointed as the charity’s bankruptcy trustee and will attempt to recover money for creditors.

The watchdog began its investigation after numerous Scottish and English local authorities raised concerns over the charity’s operations.

The charity regulator said it had determined Scotia Aid had sought charitable rates relief on properties it had leased that were left empty.

These premises were then allegedly leased back to the firms in return for donations, saving the companies that originally owned them huge sums in business rates, and leaving local councils out of pocket.

An interim report accused Scotia Aid trustees of ‘misconduct’ and raised further fears over payments to senior management at the organisation, with companies controlled by leading figures apparently paid large sums.

The report said: “Our initial inquiries gave us concerns about the activities and financial management of the charity. It appeared that the trustees were not acting in the interests of the charity and with the care and diligence that it is reasonable to expect of a person who is managing the affairs of another person, which is a legal duty of a charity trustee.”

A spokeswoman for the OSCR confirmed they were aware of the bankruptcy and said their investigation into the charity was ongoing.

She said: “We can confirm that we continue to have an ongoing enquiry on Scotia Aid Sierra Leone.

“The judicial factor appointed by the court at our request continues to run the charity. We will update our report as appropriate.”