The Charity Commission has opened a statutory inquiry and frozen the bank account of an organisation that supports terminally ill children.
The regulator announced today it has begun an investigation into Believe in Magic, for which pop group One Direction has raised over £5m, following “indications of misconduct or mismanagement”.
In August, the Commission spoke to the charity’s trustees about a number of regulatory concerns following multiple complaints about the organisation and the Commission’s own scrutiny of the charity.
But the Commission said the charity has failed to adequately address any of its concerns with the trustees so it has opened an investigation.
The investigation will consider to what extent the charity is operating towards its charitable objects and for the public benefit.
It will examine the trustees’ non-compliance with their reporting duties, specifically the non-submission of the charity’s annual accounts and reports. Its accounts and annual return for the year ending in November 2015 have not been received by the Commission and are 214 days overdue.
Previously, its accounts for the year ending November 2012 were submitted 190 days late and its accounts for the year ending November 2014 were also late.
The Commission will investigate the extent to which the trustees have acted in the charity’s best interests and in accordance with their legal duties and whether they have responsibly managed the charity’s resources and financial affairs.
It will also look at whether the trustees ensured that conflicts of interest in the charity have been adequately avoided or managed and properly authorised benefits to trustees and connected persons.
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The Commission has frozen the charity’s bank account, prohibiting it from making payments or withdrawing money from the account unless they have the regulator’s prior authorisation.
It has also directed the charity to provide information and documentation that will assist the inquiry.
Believe in Magic has been contacted for a response.
One Direction member Louis Tomlinson has been a frequent supporter of the charity.
In August 2015, Tomilinson paid for a Cinderella dinner and charity ball for the charity, where terminally ill children were dressed like princes and princesses.
Band member Liam Payne also attended the event and the two raised over £5m from ticket sales and auctions held on the night.