The Charity Commission has removed a London-based church charity from its register after an internal schism between the trustees impacted service delivery, finances and governance.
Ethiopian Orthodox Tewahdo Church St Mary Tsion was removed from the register on 27 March 2023 after its assets and property had been transferred to a newly formed charitable incorporated organisation (CIO) in 2018.
The Commission opened its first inquiry into the charity on 31 March 2014 over governance issues, which the latter appealed to the first-tier tribunal two weeks later. Following the appeal, the inquiry was withdrawn.
A second inquiry was opened on 6 October 2014 to investigate concerns arising from an “entrenched, long-running dispute” over the trusteeship and management of the charity and repeated failure to file annual accounts and annual returns on time.
The Commission was unable to determine trusteeship and authorised one of the parties involved in the dispute to begin court proceedings.
On 30 April 2018, the High Court ordered Ethiopian Orthodox Tewahdo Church St Mary Tsion to be incorporated into a new CIO, which resulted in the appointment of new trustees and the transfer of the charity’s assets to it.
The regulator subsequently removed the charity from the register “on the grounds that it has ceased to operate”.
The findings
The inquiry found that there were two factions within the charity that both deemed themselves to be the rightful trustees, each disputing the legitimacy of the appointment of the other.
The dispute was so “entrenched” that it disrupted the charity’s operations including service delivery and “allegedly contributed to public disorder” in the local community.
“As a result, the trustees persistently failed to meet their statutory duty to submit annual accounts and annual returns to the Commission on time,” the inquiry report said.
The Commission said that all attempts at mediation failed and that only the courts could determine trusteeship.
Following the High Court judgement, the new CIO was registered with the Commission on 5 November 2018.
Earlier this year – after multiple delays – the Commission finally received confirmation from the solicitor representing the CIO trustees that the completed transfer deeds had been submitted to HM Land Registry.
“The inquiry removed the charity from the register of charities under section 34(1)(b) of the Act, on the grounds it has ceased to operate,” the report said.
‘Dispute directly contributed to charity’s issues’
The parties involved in the dispute spent a “significant amount of time and resources of the charity” on trying to resolve the dispute and related litigation.
“The Commission concluded that the dispute at the charity directly contributed to the issues faced by the charity. Individuals on both sides of the dispute were unable to put their differences aside and co-operate for the benefit of the charity and its beneficiaries,” the report said.
“The Commission further concluded that it was not proportionate to attempt to investigate the history of the administration of the charity whilst the charity proceedings were ongoing. It was also not proportionate to undertake any further investigation once the charity proceedings in relation to the dispute between the trustees had concluded and the assets and property of the charity transferred to the CIO.”
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