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Preservation charity shut down after trustees found using funds for personal benefit

05 Nov 2021 News

Trustees at the Manor Building Preservation Trust used the charity’s funds to live in a mansion rent-free, to buy high-end cars and give each other salaries of over £128,000, the Charity Commission has found. 

The Commission published the findings of its statutory inquiry into the preservation charity earlier this week and concluded that there was serious misconduct by its trustees. The Manor Building Preservation Trust had its charity status removed on 5 January 2021.

The regulator opened the inquiry in June 2016 after it was suspected that trustees were using charitable funds for “significant private gain”.

A family affair

Cyril Smith and his son and daughter-in-law, Matthew Smith and Mariya Smith, were the three main trustees of the charity, which was formed in 1999 and registered in 2004 with the aim to “preserve for the benefit of the nation, the historical, architectural and constructional heritage that may exist in building”. However, the inquiry found that trustees had used this mission as a guise to inhabit a mansion rent-free.  

The trustees purchased Goldington Hall supposedly “as a renovation project and a method of generating revenue for the charity”. The Commission found that since 2010 they were living in the property rent-free and using it as their family home. 

Household costs of the hall – including utility, phone and internet bills were all paid for by the charity. The inquiry identified £30,841 billed to the charity from 2011-2016 on power, phone and internet expenditure alone. 

Though the trustees told the inquiry that “their occupation of the hall acted as a form of security service”, the Commission ruled that the private benefit of occupying the hall outweighed the benefits to the charity. It noted that alternative security arrangements could have been considered by the trustees, such as opening the hall for public use under the supervision of the charity. 

High-end cars purchased with charity funds

The Commission also found that these trustees had used charitable funds to pay for and maintain high-end cars like Bentleys and Land Rovers.

Some of these cars were valued at £80,000 - £100,000 and “used for private benefit with no, or very little benefit to the charity”. 

The vehicles were registered under the names of the trustees rather than the charity. The inquiry uncovered that not only were the cars purchased with the charitable funds, but a further £40,883 was incurred to the charity on service costs, insurance and plate transfers. In addition, £19,663 was spent on costs for the Range Rovers. 

Entertaining and travel 

The Commission found that a £17,655 of the charity’s money was spent on entertaining and £20,300 spent on travel and livelihood costs which bore no relation to the charity’s goals but only served to benefit its trustees. 

A further £31,220 of charitable funds was spent on professional advice regarding the potential development of plots of lands, as Matthew Smith was seeking to build a property “to be used as a domestic family home”. 

Not only that, the charity incurred more costs from attempting to obtain a ninth century castle in Spain known as Láchar, which did not further the charity’s aims. The trustees also bought two residential properties in Ukraine which again “did not further its objects and the charity suffered a loss in relation to these purchases”. 

Salaries for voluntary work

Furthermore, the inquiry found that between 2011-2016 two of the trustees – Matthew and Mariya Smith – had been paid £128,017 in salary for services to the charity. 

As the role of trustee is typically voluntary, any remuneration for the role “must be authorised by a provision in the charity’s governing document, by the Commission or the court”. Though certain clauses would make these payments acceptable, the Commission found that none were applicable.

The Charity Commission said: “The inquiry found that the payments of wages to the trustees were not authorised and were in breach of the charity’s memorandum of association and an inappropriate use of the charity’s funds.”

The trustees were removed and the charity shut down earlier this year. 

Following this, the Manor Building Preservation Trust’s remaining assets have been redirected to The Landmark Trust, a building conservation charity. 

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