Investigation into a charity that has granted over £ 1.7million in loans to a connected business
The Charity Commission has launched a forensic investigation into a charity whose directors were implicated in granting loans totaling more than Â£ 1.7million to a company they had ties to.
The regulator first opened an investigation into the MB Foundation (also known as Mossad Horav Aryeh Halevy) as part of its “double defaulters” category investigation for failing to submit annual accounts for the years ended. March 31, 2014 and March 31, 2015.
Subsequent review of the accounts and information received from the directors raised several concerns about the governance of the charity, in particular the management of conflicts of interest by the directors, the commission said.
The charity lists its activities as providing financial support to help alleviate disease and poverty.
But the charity’s trustees, who the commission said were all brothers, made several transactions with businesses and individuals directly related to the trustees or family members of the trustees.
This included a total of four connected business loans totaling more than Â£ 1.7million, according to the regulator.
The charity’s total income up to March 31, 2020 was Â£ 941,000 according to its registration in the online register of charities.
The trustees had not provided any formal documentation regarding the loans, the commission said, and they did not provide any information demonstrating that they had correctly identified or managed the conflicts of interest.
The regulator said its investigation will focus on the decision-making of the trustees, particularly with respect to loans and investments and whether the trustees have adequately managed potential conflicts of interest.
He will examine whether there has been any unauthorized or indirect private benefit,
whether the charity has suffered a financial loss as a result of mismanagement / misconduct.
It will also assess whether the Trustees have fulfilled their duties and responsibilities under the Charities Act.
Third sector was unable to contact anyone from the charity for comment.