Decision

Charity inquiry: JAFLAS

Published 6 March 2024

Applies to England and Wales

The charity

JAFLAS (‘the charity’) was registered with the Charity Commission (‘Commission’) on 2 June 2011. It was a company limited by guarantee governed by a Memorandum and Articles of Association incorporated on 23 February 2011.

At the time the inquiry was opened the objects of the charity were:

“The relief of financial hardship by the provision of free legal advice and assistance to persons who, through lack of means, would otherwise be unable to obtain such advice”.

The charity no longer operates and has been removed from the register of charities.

Background and Issues under Investigation

The charity was founded by Alan Blacker (‘Dr Blacker’). At the time of the inquiry there were 3 trustees in post, Paul Bohill, Stephen Ashforth and Julie Ashforth (‘the trustees’).

On 14 September 2020, the Commission became aware that Dr Blacker had been convicted of an offence involving dishonesty or deception, the consequence of which was that he was automatically disqualified from holding the office of charity trustee and or holding a position with senior management functions within a charity by virtue of section 178 of the Act.  His disqualification as a result of the conviction will last until his conviction is spent on 10 October 2024.

On 17 September 2020 the Commission wrote to Dr Blacker to advise him that he is disqualified from acting as a trustee. Dr Blacker subsequently submitted an application to the Commission for a waiver of his disqualification the result if granted  would be to enable him to continue in the role of trustee.

On 11 November 2020 he notified the Commission that he had resigned as trustee of the charity to the Commission, but Companies House records were not updated to reflect this. On 4 May 2021, the Commission refused to grant a waiver in respect of both the specific charity and charities generally. Dr Blacker challenged this decision, but it was ultimately upheld at the First Tier Tribunal (Charity) on 15 April 2022.

On 11 March 2022 Dr Blacker updated the charity’s records with the Commission by removing the details of one bank account and replacing them with another. The charity’s new bank account was stated to be in the name of ‘JAFLAS Dr Alan Blacker & Co’. Enquiries made by the Commission with the bank confirmed the existence of an account held by Dr Blacker in the name ‘Jaflas Dr Blacker’ and, whilst there is a single digit discrepancy in the account number provided by the bank compared to that provided to the Commission by Dr Blacker, the Commission is satisfied that this is likely to be a typographical error.

The bank also confirmed that the only person authorised to use this account is the person to whom it was issued (that being Dr Blacker) and any additional card holders he added. The bank confirmed there were no other cardholders.

The Commission was concerned that the account provided to the Commission for the charity was held by Dr Blacker, included his name, was registered to him and his home address. Given that Dr Blacker was disqualified at this time, and was aware of his disqualification, it was inappropriate for him to open an account on behalf of the charity and then be a card holder. This placed him in a position where he has not only control and custody of the charity’s funds, but potentially sole control and custody of the funds.

The inquiry was opened on 13 July 2022.

The issues under investigation were:

• whether a disqualified individual has continued to play a role in the charity – acting whilst disqualified has both criminal and civil consequences
• the trustees’ response to the automatic disqualification of a trustee and their decision making regarding that individual’s continued involvement in the charity
• whether the charity’s objects are being met and the charity is operating for the public benefit
• the trustees’ compliance with their legal obligations for the content, preparation and submission of the charity’s accounts, and other information and or returns

The charity was dissolved on 27 December 2022 and it was removed from the register.

The inquiry closed with the publication of this report. 

Findings

Whether a disqualified individual has continued to play a role in the charity

The inquiry found that Dr Blacker continued to play a role in the charity following his automatic disqualification. Dr Blacker continued to be listed as a director (the directors of a charitable company are its trustees) of the charity at Companies House throughout the Commission’s engagement to the date the charity dissolved. The trustees failed to remove Dr Blacker as a director from that platform despite being advised by the Commission. On 5 September 2022 an application was submitted to Companies House to dissolve the charity. This application bore the signature of Dr Blacker as an authorising director in his own right and on behalf of another trustee.

The inquiry found that during a meeting of the trustees on 5 September 2022 that Dr Blacker was given unequivocal power by the trustees to undertake the closing of the charity.

The inquiry found that Dr Blacker had, following his automatic disqualification, updated the Commission’s records regarding the charity’s bank account, removing details of one account and replacing them with another. This new account was subsequently frozen by the inquiry by an Order made under section 76(3)(d) of the Act in order to ensure that all charity funds and assets were protected. Following this Dr Blacker told the Commission that this account was solely his and was separate from the charity.

The inquiry found that despite the assertion this account was separate and not the charity’s bank account it was in fact being used by the charity in order for them to solicit funds and donations which were deposited into it. This demonstrates Dr Blacker’s continued involvement in the charity.

The inquiry found that the domain name for charity’s website was registered solely to Dr Blacker and that he had never transferred ownership of it over to the charity. The inquiry found that the trustees had insufficient control of the charity website following the disqualification of Dr Blacker. 

The inquiry found that Dr Blacker continued to act as a trustee/director of the charity despite being disqualified which is misconduct and/or mismanagement in the administration of a charity and is a criminal offence ^{[footnote 1]}.

The trustees’ response to the automatic disqualification of a trustee and their decision making regarding that individual’s continued involvement in the charity as well as their compliance with their legal obligations for the content, preparation and submission of the charity’s accounts, and other information and or returns

The inquiry found that the way in which the trustees responded to the automatic disqualification of Dr Blacker fell short of the standard expected of charity trustees. There were failings regarding their compliance with the governing document, charity law, financial controls, keeping adequate records and cooperating with the Commission.

Article 36 of the charity’s Memorandum & Articles of Association states that a director shall cease to hold office if he or she is disqualified from acting as a trustee by virtue of section 72 of the Charities Act 1993 (or any statutory re-enactment or modification of that provision). On 11 March 2022 the Commission highlighted to the trustees that Dr Blacker was listed as a director of the charity on Companies House despite his disqualification. Mr Bohill took responsibility for this oversight. However, Companies House records for the charity continued to list Dr Blacker as being the company secretary, a director and the person with significant control until it was dissolved. This failure to ensure Companies House records were accurate is misconduct and/or mismanagement in the administration of the charity and is in breach of article 36 of the charity’s governing document.

The inquiry also found that the trustees had given Dr Blacker unequivocal power to dissolve the charity and allowed him to sign the paperwork on behalf of one trustee and also in his own right.

The inquiry found that there was no clear separation between the charity and the private company controlled by Dr Blacker, namely ‘JAFLAS Dr Alan Blacker & Co CIC’ (Company A).

During the inquiry the charity’s website described it as merging with Company A. A charity cannot simply merge with a non-charity, because a charity’s assets can only be applied for charitable purposes and such a merger (without clear restrictions) would permit a charity’s assets to be applied for non-charitable purposes. This is not permissible under charity law.

The inquiry found the trustees failed to demonstrate a clear distinction between the charity and the company of Dr Blacker and this was demonstrated both in the similarities in the names of both entities and in how the trustees portrayed the charity to potential donors or funders. It was found that when people opted to donate through the charity’s website those donations went to Dr Blacker’s account. This demonstrated the trustees had allowed the charity’s website to be used by a non-charity to raise funds in a manner that may have misled the public into believing they were supporting a registered charity.

The inquiry found that the trustees eventually corrected their messaging on the charity website after being directed to do so by the inquiry. At a later date the inquiry established that the website was registered solely to Dr Blacker (and always had been) and was now for the sole use of Company A. However, the trustees had failed to ensure that the charity’s registration number was removed from the website.

As stated above Dr Blacker had full control over the charity’s website. The inquiry found that this lack of ownership and oversight of the charity’s website to be misconduct and/or mismanagement on the part of the trustees.

The inquiry found that the trustees had enabled or failed to stop Dr Blacker from updating the Commission’s records regarding the charity’s bank with the details of his own bank account. This raised serious concern as it enabled charitable donations to be channelled into his private bank account.

The inquiry found that the trustees failed to cooperate fully during the inquiry. On numerous occasions orders and directions were ignored or not answered in full. For example, from the outset, the inquiry sought to ascertain what bank account the charity used. Despite numerous requests and directions, the trustees refused or ignored this request for information. Therefore, the Commission was unable to ascertain what the charity’s financial situation was. 

Trustees have a duty to ensure their charity is accountable and that they manage the charity responsibly. The inquiry found that despite numerous requests and directions the trustees failed to give a clear picture of the charity’s financial situation and denied that the bank account of Dr Blacker was linked to the charity despite evidence to the contrary. The trustees and Dr Blacker both stated to the Commission that the account that was frozen, the details of which were provided to the Commission as being the charity’s bank account, was not in any way linked to the charity. It was later found this was the account the charity used for fundraising.  This is likely a breach of section 60 of the Charities Act 2011 which states it is an offence for any person to knowingly or recklessly provide the Commission with false or misleading information.

The inquiry found that the trustees failed to keep adequate records for the charity. As part of the inquiry’s books and records visit the trustees were asked to make the charity’s books and records available for inspection. The trustees had only limited information and records available including some incomplete bank statements, meeting minutes and policies and procedures. When asked as to the location of the missing documents the trustees stated either that they didn’t know or suggested that the Commission ask Dr Blacker as to their location.

The inquiry found the trustees to be obstructive and uncooperative when seeking to meet with the trustees to discuss the issues present at the charity. Initial requests were ignored by all trustees and when the trustees were directed to meet with the Commission only one trustee did so. However, this trustee then proceeded to answer every question with a ‘no comment’ response.  

Whether the charity’s objects are being met and the charity is operating for the public benefit

The inquiry could not establish how the charity’s objects were being met or how the charity was operating for the public benefit. No substantial records or evidence were provided to the inquiry during the books and records visit or at any point over the course of the inquiry.

Conclusions

The Commission concluded that there was serious misconduct and/or mismanagement in the administration of the charity due to the poor financial management and governance, including the trustees:

• failures to comply in full and within the deadline of Orders and Directions of the Commission
• decisions which exposed the charity to risk, and which appeared to benefit the private business interests of one of the former trustees

The Commission further concluded that the trustees did not distinguish between the charity and the other entity they were connected to and there was no way of effectively managing the risks involved.

The Commission concluded that Dr Blacker held a dominant position at the charity prior to and following his automatic disqualification. The other trustees were either unable or unwilling to respond appropriately and prevent Dr Blacker from continuing to act in the position of trustee.

Trustees are responsible for the administration and management of their charity, and this involves them acting to an appropriate standard and taking proper steps to respond when things go wrong. Following the automatic disqualification of Dr Blacker; the trustees failed to stop him continuing to act as a trustee and appeared to have little control over the charity or its operation until it dissolved.

Regulatory Action Taken

On 27 July 2022 the inquiry made an order not to part with charitable property, under section 76(3)(d) of the Act, the impact of which was to freeze a bank account. This was discharged on 2 August 2022.

The inquiry exercised its powers under section 47(2)(a) and (b) of the Act on several occasions to obtain information and documentation from the trustees and a range of third parties.

On 11 August 2022 the inquiry referred its concerns that an individual was acting whilst disqualified to Greater Manchester Police.

On 5 September 2022 the inquiry exercised its powers under section 84A and 337 (1) to direct the trustees to cease a number of activities, namely, to cease fundraising and referencing Company A in the charity literature and website, and to carry out further actions.

On 14 February 2023 the inquiry exercised its power under section 47(2)(c) of the Act to direct the former trustees and disqualified individual to appear at a set time and place in order to answer questions related to the inquiry.

Against individuals

On 9 October 2023 the inquiry exercised its powers under section 181A to disqualify Dr Blacker for a period of 15 years, Mr Bohill for a period of 10 years, Mr Ashforth for a period of 7 years and Mrs Ashforth for a period of 7 years. These orders came into effect on 20 November 2023.

Issues for the wider sector

The purpose of this section is to highlight the broader issues arising from the inquiry that may have relevance for other charities. It is not intended as further comment on the charity in addition to the findings and conclusions set out in the earlier sections of this report but is included because of their wider applicability and interest to the charity sector.

Charity trustees must comply with Orders and Direction of the Commission. In some circumstances it may be a criminal offence (or contempt of court) for a charity or a trustee to not comply with an Order or direction of the Commission.

Charity trustees must comply with all their legal obligations. An important part of their duties is following their charity’s governing document and the wider law. Not complying with the legal requirements may be regarded as misconduct and/or mismanagement in the administration of the charity and prompt regulatory action by the Commission.

Trustees are responsible for protecting their charity’s distinct status and need to manage the charity’s relationship with any third party with sufficient skill and care, being aware of, and mitigating where possible the risks associated with connections to non-charitable organisations.

Trustees need to ensure that in any dealings or connections between charities and non-charities that the charity recognises the risk of such a relationship, that it operates independently and maintains its separate identity.

Charity trustees are the people who share ultimate responsibility for governing a charity and directing how it is managed and run. They are the representatives of the charity in the charity sector. The conduct of trustees can be a key driver of public trust and confidence in the charity sector. When the conduct of trustees falls below the standards expected there can be damage to the reputation of individual trustees, the charity and possibly the wider charity sector. More information can be found from The essential trustee: what you need to know, what you need to do.

1. Section 183, Charities Act 2011 (legislation.gov.uk) ↩