The Charity Tribunal has dismissed an appeal by the chair of a charity where a fundraising deal saw much of the money raised in the charity's name go to a company run by her partner's son.
According to a judgment released earlier this month, Pauline White appealed on behalf of military charity Support the Heroes, against the Charity Commission’s decision to appoint an interim manager at the charity, to the exclusion of the trustees.
The Commission had stepped in after discovering a deal which it says saw 84 per cent of funds raised on the charity’s behalf go to Targeted Management Limited, a company run by Anthony Chadwick, the son of White’s partner - although White disputes this figure.
'Evidence of mismanagement'
The Commission said there was “evidence of mismanagement and/or misconduct in the administration of the charity, consisting of a failure to avoid or adequately manage conflicts of interest in respect of the relationship with TML.”
It also said it was concerned that the relationship with TML had exposed the charity to “reputational and financial risk” and that the trustees had failed to discharge their legal duties.
A wholly owned subsidiary of the charity was used for the deal. In one year, the subsidiary spent £376,000 on “cost of sales” but donated only £60,000 to the charity.
The judgment also said that another of Chadwick’s companies had provided the money to set the charity up initially.
The Commission appointed Brian Johnson of HW Fisher & Company as interim manager of the charity on 9 December 2016. He was appointed with all the powers and duties of a trustee, to the exclusion of the current charity trustees.
Johnson’s appointment was controversial because he had already, as interim manager of another military charity Afghan Heroes, attempted to sue another of Chadwick’s companies for £2.9m.
A third military charity with links to Chadwick companies, Our Local Heroes, is also under investigation by the Commission.
White, acting on behalf of the charity, challenged the decision to appoint an interim manager, arguing that it was unnecessary because the Commission had already frozen the charity’s bank accounts, and that it was premature because the Commission had not yet met the trustees.
But the tribunal judgment said that the Commission’s decision was “lawful and proportionate” and the appeal was dismissed.