Investigation into overseas payments by Leicester-based charity

The Charity Commission has opened a statutory inquiry into Bhaarat Welfare Trust and frozen its bank accounts, over concerns about its financial management

The charity, which was established in 1998, has objects to promote the Hindu culture and religion, to advance education and to relieve poverty. It carries these out by making grants, primarily overseas, and has recorded an annual income of between £1m and £1.5m over the past five years.

The Commission has been engaging with the charity since 2013, but found serious issues when it visited the charity in 2015.

The inquiry will examine whether the trustees have acted prudently in relation to the financial administration and management of the charity and have complied with and fulfilled their duties and responsibilities.

It will also look at whether the trustees have protected the charity’s assets, including its reputation in relation to the ongoing dispute with another registered charity. The Commission will consider whether legal action taken against another charity is lawful and if so, whether use of charitable funds on this action is justifiable.

The Commission conducted a books and records inspection at the charity in May 2015, and identified a number of serious regulatory concerns about the financial management of the charity. In particular the Commission had concerns about the ability of the trustees to account for funds transferred to India between 1 April 2010 and 31 March 2015, the basis on which donations for a specific project were held, unmanaged conflicts of interests and whether gift aid had been validly claimed by the charity.

In August 2015 the regulator issued an action plan for the trustees to address these concerns. However the charity’s response provided in November 2015 was lacking. Further meetings were held in August and November 2016 but the trustees failed to address the Commission’s concerns.

The Commission stresses that opening an inquiry is not in itself a finding of wrong doing. At the conclusion of its investigation, it will publish a report detailing what issues the inquiry looked at, what actions were undertaken as part of the inquiry and what the outcomes were.  

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