The Charity Commission has disqualified trustees and recovered thousands of pounds from two foundations it investigated after allegations arose around donations intended for charities linked to King Charles.
The Commission banned a trustee of the Mahfouz Foundation and two trustees of the Burke’s Peerage Foundation for 12 years from holding senior positions in the sector after finding misconduct and/or mismanagement at both charities.
The regulator recovered £113,000 of misapplied charitable funds from the Burke’s Peerage Foundation and £49,581 from the Mahfouz Foundation.
Meanwhile, a separate investigation into the King’s Foundation by Scottish charity regulator OSCR is ongoing.
Mahfouz Foundation
The Commission’s inquiry into the Mahfouz Foundation, a charity that aimed to advance the history, literature, language, institutions and culture of the Middle East, was opened in November 2021.
It examined if the charity, founded by Saudi billionaire Mahfouz Marei Mubarak bin Mahfouz, had used its donations to advance its charitable purposes.
The regulator concluded that the charity’s trustees used its bank account as a conduit to transfer funds on behalf of third parties, and the funds did not further its charitable purposes.
Funds included deposits into the charity’s bank accounts that donors believed were being made directly to the King’s Foundation, a charity registered in Scotland.
The inquiry also found out that £193,730 of the donations intended for the King’s Foundation were transferred from the charity’s bank account to trustee Michael Wynne-Parker’s private company bank account.
Wynne-Parker has been disqualified from serving as a trustee or in a senior management position in any charity for 12 years.
The regulator oversaw the return of £106,270 to the donor, which is the amount that had remained in the charity’s bank account from the original deposit.
The inquiry also required the repayment of £49,581 by the trustees to make up for the loss the charity had incurred due to misapplied funds.
As previously reported, the Mahfouz Foundation was removed from the charity register on 6 October 2023.
Angela Ascroft, critical case lead for the Commission, said: “The trustees’ actions in this case demonstrated scant regard for the charity’s purposes, instead allowing the charity to be misused as a conduit for funds that were misapplied and misused.
"All trustees of a charity are jointly responsible for ensuring its funds and bank account are used only to achieve its purposes.
"Our work in this inquiry demonstrates that we will not hesitate to take strong action where trustees fail in these essential duties.”
Burke’s Peerage Foundation
The statutory inquiry into Burke’s Peerage Foundation, established to advance the education of the UK public in the subject of genealogy and heritage, came out of the investigation of the Mahfouz Foundation in February 2022, when the Commission discovered the links between the two charities.
The Commission opened an inquiry to determine the extent to which the trustees were complying with their legal duties in the way they administered and managed the charity, including compliance with legal obligations on annual accounts and returns.
The inquiry concluded that trustees William Bortrick and Mark Ayre failed to manage conflicts of interest, misapplied charity funds, received unauthorised personal benefit and failed to submit accurate annual returns to the regulator.
It found that the trustees had purchased items that did not further the charity’s purposes, including antique furniture, paintings and statues.
For example, a desk and bookcase were bought for £16,000 using the charity's funds and were kept and used at Bortrick’s home.
The inquiry also found out that the charity paid for services that benefited a company linked to both of the trustees.
The Commission recovered £113,000 of misapplied charitable funds from the trustees. And the charity’s remaining funds, £121,455, were passed to another charity which will use the money in line with its objectives.
The Commission has disqualified Bortrick and Ayre from being trustees or senior managers at any charity for 12 years and the charity was removed from the charity register on 2 August 2023.
Ascroft said of this case: “Throughout the inquiry, Mr Bortrick and Mr Ayre provided contradictory statements and proved to be unreliable witnesses.
“They also failed in their most basic duty to act in the charity’s best interests and are responsible for serious misconduct and/or mismanagement.
“The Commission’s intervention means that, whilst disqualified, they can no longer be trustees or senior managers in charities.
“Our intervention also ensured that misapplied funds of more than £100,000 have been repaid and transferred to another charity.”
Ties with ‘cash for honour’ scandal
Previously, the Sunday Times published allegations that Mahfouz’s donations to the then-named Prince’s Foundation, a charity set up by King Charles III in 1986, was part of an effort to try and gain British citizenship and an honour.
The investigation further alleged that Michael Fawcett, then chief executive of Prince’s Foundation, coordinated an honour exchange for donations. Fawcett temporarily stepped down as its chief executive after the Times’ investigation.
It also alleged that Bortrick acted as the fixer who transferred the donation of a Russian businessman to the Prince’s Foundation, after its ethics committee rejected the gift due to his financial crime allegations in Russia.
The charity later accepted a donation through the Mahfouz Foundation, which acted as an intermediary and was controlled by Bortrick, according to the Times’ investigations.
The Times’ investigations prompted the Metropolitan Police to investigate the allegations. The Met eventually closed the investigation and concluded that there were no wrongdoings by Mahfouz or the king.
Civil Society has contacted the King’s Foundation for comment.
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