Poverty charity Achiezer had been removed from the register of charities, following an inquiry that found one its trustees had used its charitable status to try and avoid paying business rates.
The regulator found that the charity had made payments totalling £129,800 to Dasim Partners, a property development company of which two trustees were partners.
Achiezer's trustees were three brothers, Sidney Chontow, David Chontow and Michael Chontow. David Chontow and Michael Chontow have passed away.
The Commission found Sidney Chontow had attempted to avoid paying £59,000 of business rates to Bury council, by letting out property from his private firm to the charity.
Conflicts of interest
In 2013, Achiezer was included in a class inquiry conducted into charities which have defaulted on their statutory filing obligations with the Commission on two or more occasions in the last five years.
Concerns were identified about Achiezer’s governance and financial management, and a statutory inquiry into the charity was opened in June 2015.
The inquiry concluded that the trustees had not managed conflicts of interest, as there were no independent trustees, and the basis of a number of payments was unclear.
It also found that one of the trustees, Sidney Chontow, had obtained personal benefit.
Potential Investment Portfolio, of which Sidney Chontow was a partner, attempted to avoid paying £59,000 of business rates to Bury Metropolitan Borough Council, by letting out property to the charity.
The firm would be liable for business rates on an empty property, whereas property used for charitable purposes is exempt.
Achiezer became liable for the business rates when it was found that the property was not used solely for charitable purposes and therefore was not entitled to an exemption.
The inquiry found that the charity’s bank accounts known to the Commission had all been closed, with the last one closed in September 2016.
The charity was the registered freeholder of 18 properties that generated an income from ground rents for the charity.
Trustees ‘abused their position’
An interim manager obtained control of the charity’s assets and took the decision to wind up the charity.
The 18 freehold properties were sold and once legal and professional fees had been paid the charity received £623,000.
Sidney Chontow paid the outstanding business rates to Bury council and the charity’s remaining funds, amounting to over £400,000, were distributed to charities with similar charitable aims.
The charity was wound up and removed from the Commission’s register of charities on 7 April 2022.
Amy Spiller, head of investigations at the Commission said: “The Chontows abused their position as trustees, to derive personal gain for themselves and their businesses to the detriment of the charity. It is right that they were removed as trustees, and that this charity has ceased to operate.”
A class inquiry into another charity which had the same trustees, Achiezer Association Ltd, is ongoing.
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