Trustees banned after transfer of personal mortgage liabilities to their charity

20 Mar 2019 News

Two founding trustees of a religious charity have been removed and disqualified, after they transferred personal mortgage liabilities to the charity, the Charity Commission has said.

The Commission published the findings of its statutory inqiry into The Suyuti Institute yesterday

It found that trustees, Zainul Aqtab Siddiqi and Afifa Kiran of The Suyuti Institute took over a private trust, The Hajveri Foundation which then purchased a plot of land in Manchester. This incurred costs to the charity including paying off loans of £334,745.75 and council costs of over £125,000. The trust was then made liable for a £330,000 mortgage of Siddiqi’s wife’s home. The trust was also connected to Siddiqi’s mother, and the charity did not declare this conflict of interests.

The report said: “The inquiry was concerned as to whether taking on these significant liabilities was in the best interests of the charity.”

The inquiry began when the Commission discovered these liabilities, during a compliance visit which occurred as the regulator was concerned about the content of a speech on YouTube given by a trustee of the charity, and whether it was connected to the charity’s purposes.

The inquiry also found that the charity had made financial transactions without keeping formal records, and had transferred money using third parties. It found that the charity had made payments of £57,250 directly to Siddiqi, without other signatories present. He said that this was to repay funds he had lent the charity. The Commission also established that the charity had made the liability transfer at a different date than they had declared.

The report said: “The inquiry found that evidence provided in respect of money owed by third parties personally to Mr Siddiqi was convoluted and confusing and did not provide an adequate audit trail to demonstrate that the repayments were legitimate.”

The inquiry lasted from January 2017 to March 2019 and the bank account and operations of charity were frozen for the duration of the investigation.

Michelle Russell, director of investigations, monitoring and enforcement at the Charity Commission said: “The public rightly expect those running charities to live up to the highest standards of behaviour and attitude. That includes demonstrating scrupulous financial probity and being able to show that all decisions are made in the best interests of the charity and its beneficiaries.”

The trustee’s disqualification means they are unable to work in senior management positions or become trustees of other charities.

Russell added: “The two founding trustees of this charity failed to fulfil those expectations and were responsible for serious breaches of their charity law duties, which is why we removed them.”

'Getting the charity back on track'

Since the opening of the inquiry, the Commission has said that two new trustees have been appointed to the charity. Funds have been repaid to the charity, the transfer has been reversed and new financial controls and strategy have been put in place.

A spokesperson from the charity said that the new trustees had been working with the Commission “to get the charity back on track”.

He added that there was “nothing malicious” in the way the charity had acted in the past and said that the charity was establishing appropriate measures “to do things by the letter of the law”.

The Suyuti Institute exists to advance Islam. It is overseen by eight trustees. It is based in Birmingham and operates throughout England. It was established in 2013.

Charities interested in good governance can now sign up to attend the Trustee Exchange conference in April.



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