Founder pays £44,000 to charity and agrees to pay mortgage 

21 Oct 2021 News

Trustees agreed a settlement with the founder of the Alauddin Siddiqui Trust and recovered some of the funds the charity spent on his mortgage, following an intervention by the regulator. 

Between 2008 and 2020 the charity spent around £79,000 on mortgage contributions for a property that was used on a residential basis by its founder and his family.

The Charity Commission raised concerns about this arrangement during a statutory inquiry and trustees negotiated a settlement with the founder earlier this year. The founder has paid back £44,220.80 and will now pay the mortgage. 

The charity will also rent a section of the building at below market rates. 

The Commission opened a statutory inquiry into Alauddin Siddiqui Trust in October 2019 to look at concerns connected to an apparent split at the charity. 

However during the inquiry trustees clarified that “each element of the charity was in fact under supervision of the trustees”. 

Trustees also removed a former trustee as a signatory on a bank account meaning “only the current trustees can act as signatories with no charitable funds misspent”. 

The Commission's inquiry report, published yesterday, found that there was confusion between the charity and a limited company. This company has now been closed and its funds were transferred to the charity.

The regulator concludes that there was misconduct and mismanagement by trustees, but that there has been improvements to the charity’s governance. The regulator says it is satisfied with how trustees resolved issues around control of the charity and its assets.

The regulator has issued the charity with an action plan, and advised trustees to be clearer about its international humanitarian relief activities to avoid misleading donors. 

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