An aid charity has had its bank accounts frozen amid concerns over financial irregularities and misuse of business rate relief.
The Scottish charity regulator, OSCR, announced yesterday it has gained an interim order to freeze the charity Scotia Aid Sierra Leone’s accounts and appoint an interim judicial factor. It has also suspended the charity’s trustees on a temporary basis until further investigations are carried out.
An interim report by the regulator earlier in the week raised concerns over the charity’s use of business rate relief, accusing it of raising funds by entering into numerous leases with landlords “which relieve the landlords of the requirement to pay full business rates, in return for a donation from the landlords to the charity”.
The OSCR report said: "Local authorities are concerned that a number of the commercial premises leased by the charity have not been used for charitable purposes but have been left empty and, should that be the case, the charity would have no entitlement to the rates relief claimed."
The report also claims that “significant payments” were made to companies connected to trustees.
Yesterday, OSCR's head of enforcement, Laura Anderson, said that the regulator's action demonstrated its commitment to protecting charity assets and reinforcing public confidence.
“Our experience is that charities in Scotland are generally well run, and we remain committed to supporting and encouraging those running them to meet their legal duties,” she said.
“But this case shows that where we identify sufficient cause for concern, we will take action - including court action - to ensure that the public's confidence in charities and their work is maintained.”
Last year, an investigation by South Lanarkshire Council, revealed that the charity gave just 13p out of every £1 it raises to good causes.
The charity’s last reported annual income was £1.02m for the year ending 31 March 2014. But just £332,734 was spent on grants and donations. The charity is currently overdue in submitting its accounts for the following year, according to information on OSCR’s website.
The charity was set up in 2010 by a “small team of businessmen” with the aim of improving the lives of people in Sierra Leone through educational and social programmes.
A statement on the charity’s website said it aims to “create maximum impact upon the numbers of children, whose lives are controlled by the streets”.
An investigation last year by Scottish newspaper Sunday Post claimed the charity’s bosses paid themselves £313,000 and used “shell companies to minimise their tax bills”.
The paper also quoted alleged whisleblowers who claimed they used their incomes to “fund lavish lifestyles that are in sharp contrast to the children they claim to help”.
The charity was contacted for comment but did not respond by the time of going to press.
