Decision

Charity Inquiry: Jamia Hanfia Ghosia Mosque and Princess Street Resource Centre

Published 16 April 2024

Applies to England and Wales

The Charity

Jamia Hanfia Ghosia Mosque and Princess Street Resource Centre (‘the charity’) was registered with the Charity Commission (‘Commission’) on 26th January 2000. It is governed by a constitution adopted on 22 October 1999.

The charity’s primary objects are to promote the benefit of the inhabitants of Burton upon Trent and its neighbourhood, by the advancement of the Muslim religion, to advance education, to relieve poverty and sickness and to provide facilities in the interests of social welfare for recreation and other leisure time occupation.

The charity’s principal activities are the management of the mosque on 29-31 Princess Street, Burton upon Trent, the provision of ceremonies in accordance with the Islamic faith and the provision of Islamic education.

The charity’s entry can be found on the register of charities

Background and issues under investigation

Clause 6 of the constitution provides for a “Management Committee” which is responsible for the general administration of the charity. Accordingly, the members of the Management Committee are the charity trustees. In this report, the Commission refers to them as “trustees”.

The charity’s members elect the trustees annually at the Annual General Meeting. Concerns had been raised to the Commission by beneficiaries in 2019 about whether the trustees appointed in 2019 had been legitimately elected. The Commission opened a regulatory compliance case in March 2020 due to these concerns, which it closed in April 2020, taking the view that the trustees were not properly appointed, and gave regulatory advice to the charity to take steps to hold an election as is required annually.

In July and September 2020, following insufficient action, the Commission sent further regulatory advice to the charity outlining the required steps to allow an election to take place.

Following continued failure to hold an election, the Commission opened a statutory inquiry (“the inquiry”) into the charity under section 46 of the Charities Act 2011 (“the Act”) on 7th April 2022.

The scope of the inquiry was to examine:  

• the administration, governance and management of the charity and whether or not the trustees have complied with, and are fulfilling their duties and responsibilities as trustees under charity law, in particular by examining the ongoing attempts to regularise the charity’s governance and trustee board through an open and fair election
• whether and to what extent there has been misconduct or mismanagement in the administration of the charity by the trustees

The inquiry closed with the publication of this report.

Findings

Trustees

At the time of the opening of the inquiry (April 2022) the following individuals were the trustees of the charity (though not all were correctly recorded on the Register):

Zahid Ali (Chairman)	Mushtaq Ahmed
Shokhat Mahmood	Mohammad Akram
Mohammad Nawaz	Ali Ashgar
Mashooq Hussain	Muhammad Khan
Tariq Mahmood	Mohammed Rafiq
Mohammad Rashid	Mohammad Sharif

The inquiry found that the 12 individuals listed above were the persons who were in control of the administration and management of the charity from 2020 to June 2022 (despite issues relating to validity of appointments described below).  In this report, these individuals are collectively referred to as “the former trustees”.

The administration, governance, and management of the charity

Failure to hold AGMs and annual elections

The inquiry found that there had been a failure by the former trustees to hold AGMs and run annual elections as per the charity’s governing document in 2019,2020 and 2021.

Clause 7 of the constitution stipulates that the trustees must call an Annual General Meeting (“AGM”) each year within 3 months of the end of the financial year. The charity’s financial year ends on 31 March. The AGM must include the election of the trustees (consisting of a Chair, President, Treasurer, Secretary and 7 others) to serve until the next AGM.

Clause 6(3) of the constitution states that all the trustees will retire at each AGM but can put themselves forward for re-election.

An AGM was held in 2019. The former trustees told the inquiry that an election was held at this AGM. However, the documents examined by the inquiry do not support this. There was no list of candidates prepared, no facilities prepared for balloting, nor mention of an election on the agenda for the 2019 AGM. The inquiry therefore found that, there was a failure to hold an election in 2019 in accordance with the constitution and the Commission takes the view that no trustees were validly elected at this AGM.

The former trustees did not hold an AGM and election in 2020. The inquiry accepts the former trustees’ evidence that this was a consequence of the COVID-19 pandemic, but also notes that irrespective of the pandemic, no discussions or preparations took place to allow for an election once COVID restrictions were lifted.

Documents obtained during and prior to the inquiry by the Commission demonstrate that the former trustees failed to hold an AGM and election in 2021. The inquiry concluded that the predominant reason for this failure was an attempt by the former trustees to introduce bars to membership beyond what was set out in the constitution.

The trustees are elected by the members over the age of 18. Clause 4 of the constitution identifies members as those who pay the annual subscription and are accepted by the trustees. The trustees have power to refuse an application for membership.

In May 2021, the Commission repeated its previous advice to the former trustees that their proposed bars to membership were not valid.

In July 2021, the Commission communicated to the former trustees that they had not taken sufficient action to facilitate an election. The Commission encouraged the charity to engage an independent election supervisor to achieve a fair, transparent, and independent election.

The Commission also advised that if the former trustees disputed any matter relating to membership or the election process, they should request that the independent election supervisor makes a decision about the matter, and they should abide by that decision.

Popularis, an independent election specialist, was engaged by the charity to collate a membership list and facilitate an election supported by East Staffordshire Council and the Police. Popularis held membership registration sessions in January 2022 and presented a list in accordance with the governing document which, if accepted by the former trustees in February 2022, would have allowed for an election to be held by the end of March 2022. All third parties made preparations for the elections, but despite the thorough work done by Popularis, the former trustees still delayed and disputed the membership list, making it unfeasible to hold an election on the proposed date.

On 27th May 2022, the inquiry ordered the former trustees to abide by an election timetable agreed with Popularis and again, to defer to Popularis on any deadlocks relating to the membership or election process, with a view to allowing an election to be held on 9th June.

An election was held on 9th June 2022 and the charity’s members elected entirely new trustees - none of the former trustees were elected.

Unauthorised Trustee Benefits

Some of the complaints received by the inquiry were concerning unauthorised trustee benefits, however the inquiry did not find any evidence to support these allegations. The inquiry analysed bank statements of the charity between 2018 and 2022 and found evidence of a large transfer of charity funds to a former trustee. The inquiry directed the former trustees to provide information and supporting evidence to explain the payment. The inquiry found that the payment made to a former trustee was reimbursement for the cost of legal advice incurred as part of their trustee duties.

Regularising Charity Governance

The inquiry has focussed on ensuring a free and open election took place in June 2022 and that the charity is on a good governance footing going forwards.

In June 2022, the current trustees were elected. The inquiry met with some of these trustees in August 2022, including the President, Chair, Secretary and Treasurer and it is satisfied that none of the former trustees currently act as trustees, officers or agents of the charity.

The inquiry issued advice under s15 (2) of the Act to help the current, and future, trustees ensure good governance going forward.

The Charity continues to take steps to regularise its governance. An election will be held at the Extraordinary General Meeting on 29th December 2023, and the Charity is in the process of changing its structure to a Charitable Incorporated Organisation (CIO)

Whether and to what extent there has been misconduct or mismanagement in the administration of the charity by the trustees

As set out above, the former trustees failed to hold elections in accordance with the charity’s governing document for the years 2019, 2020 and 2021 without valid reason. The inquiry does accept that COVID-19 would have impacted on the former trustees’ ability to manage the 2020 election, however once the COVID restrictions were lifted no steps were taken to ensure an election took place. The inquiry found that this was misconduct and mismanagement in the administration of the charity by the former trustees.

Conclusions

The inquiry concluded that there was serious misconduct and/or mismanagement in the charity’s administration and management by the former trustees.

The former trustees failed to hold elections of trustees in accordance with the charity’s governing document in 2019, 2020 and 2021. The inquiry accepts that COVID-19 was an unavoidable obstacle to an AGM and election in 2020 however the former trustees failed to regularise this once COVID-19 restrictions were lifted.

The former trustees refused to accept membership applications from the community without a valid basis for doing so and were not acting in the best interests of the charity. This is misconduct and/or mismanagement in the administration of the charity by the former trustees.

The former trustees failed to follow the Commission’s written advice, given on several occasions between March 2020 and April 2022, despite having been made aware of the risk to the charity. This failure was misconduct and/or mismanagement in the administration of the charity by the former trustees. The former trustees do not agree with this conclusion.

The inquiry has received assurances and is satisfied that the current trustees understand their duties as trustees and are capable of effectively managing the charity.

Reference that the charity is continuing to strengthen the charity’s governance and is exploring conversion to a CIO model of governance.

Regulatory Action Taken

Information gathering powers under sections 47 and 52 of the Act were used throughout the inquiry.

On 27th May 2022, the inquiry issued an order under section 105 of the Act to allow the charity to hold an election outside of an AGM and another on 23rd October 2023 to allow for an extraordinary general meeting.

On 23rd December 2022 and 18th April 2023, the Commission issued regulatory advice and guidance under s15(2) of the Act. It is the Commission’s expectation that the trustees will follow this advice in order to act in the best interests of the charity.

Issues for the wider sector

Trustees are representatives of the charity they govern or the charitable funds they are responsible for, in the charity sector. Trustees must be aware of and act in accordance with their legal duties. 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 the wider charity sector.

Trustees must act in accordance with the charity’s governing document. Trustees should be familiar with their governing document.