Kingsway International Christian Centre, KICC, a 12,000-member megachurch in Britain lost the equivalence of $4.8 million in charitable funds after trustees carelessly invested money in what later turned out to be a ponzi scheme headed by a former Premier League soccer player.
According to an inquiry report published last week by the Charity Commission for England and Wales, the Kent-based KICC, which is owned by Nigerian Pastor Matthew Ashimolowo came away with a net loss of about $4.8 million (£3.9 million) between June 2009 and June 2010 to a former trustee who guaranteed that the investments would earn a sizable return totaling about 55 percent in a year.
Although the commission’s report does not state names, The Telegraph UK reports that the person who the church trustees handed the money to was Richard Rufus, a former defender for the Charlton Athletic Football Club who was also a former minister and trustee at the church.
Last year, a judge found that Rufus had conned about 100 investors out of a total of $10,731,159 (£8,682,343) in the £16-million investing scheme with Kingsway International Christian Centre being the single largest investor.
According to the commission’s report, the church’s trustees handed over an initial investment and entered into an agreement in which they were guaranteed that investment would earn a profit of about 5 percent per month, with the exception of August and December when they were guaranteed profits of about 2.5 percent.
“The inquiry established that in practice, however, the investments resulted in a net loss of £3.9 million to the charity,” the report explains.
The report states that the church’s trustees who handed over the funds were guilty of “mismanagement.” The commission found that the church’s trustees did not “exercise sufficient care when making the decisions to invest £5 million of the charity’s funds through the ex-trustee’s investment scheme.”
“They did not follow all the principles expected of trustees to ensure they comply with their trustee duties under charity law when making those decisions,” the report concludes.
The Charity Commission was first alerted to the church’s investment when it found that the church made £3 million of investments with a “qualified independent trader” who was “in a position to provide the services of an investment manager by investing in financial markets.”
After the commission contacted the Financial Services Authority to verify the trustee’s status as a trader, it found that the trustee in question was not, nor had he ever been, licensed to “carry on regulated activities in a personal capacity.”
The commission also found that the investments were paid to the trustee’s personal bank accounts. Additionally, the commission found that the investments “appeared to be speculative and high risk in nature.”
As a result of the commission’s inquiry, an interim manager was appointed to review the trustees’ decisions to invest the £5 million and to decide whether any of the trustees should be held personally liable.
$4.8 Million is a huge
amount of money;
what a big lost.
That is a big amountn of money. The lost is a big one