Decision

Charity Inquiry: Olive Grove Foundation

Published 20 May 2025

Applies to England and Wales

The Charity

Olive Grove Foundation (the ‘charity’) was entered onto the Register of Charities (the ‘Register’) on 25 May 2011. The charity is governed by a declaration of trust (the ‘governing document’) dated 7 February 2011.

The charity has purposes to prevent or relieve poverty, relieve financial hardship worldwide, assist young people to advance in life and promote sustainable development by the relief of poverty and the improvement of the conditions of life in socially and economically disadvantaged communities.

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

Background and Issues under Investigation

On 15 January 2019, the Charity Commission for England and Wales (the ‘Commission’) proactively carried out a monitoring inspection of the charity due to its international operations and expenditure in a high-risk area, namely Syria. Charities which operate internationally can be more vulnerable to abuse or harm because of where and how they operate.

The monitoring inspection, which included meeting with some of the charity’s then trustees, sought to review the charity’s policies and financial records and to ensure the trustees were complying with their legal obligations in exercising control and management over the charity and its activities overseas.

As part of its monitoring inspection, the Commission identified regulatory concerns in relation to the trustees’ governance, management, and administration of the charity, which included the charity’s overseas activities.

On 2 October 2019, the Commission closed its monitoring case and issued the trustees, under section 15(2) of the Charities Act 2011 (the ‘Act’), regulatory advice and guidance which sought to address the Commission’s regulatory concerns. In closing its case, the trustees were made aware that the Commission would re-inspect the charity in 2020 to ensure that the trustees had acted on the provided regulatory advice and guidance.  

In June 2020, the Commission re-engaged with the charity to assess whether the trustees had acted upon the previously issued regulatory advice and guidance. As such a meeting was held with a former trustee on 13 August 2020, followed by a second meeting with then trustees, Mr Mohammed Bhaiyat (‘Mr Bhaiyat’) and Mr Yaseen Rehman (‘Mr Rehman’) on 21 August 2020.

Having met with the trustees and conducted a review of relevant records, the Commission concluded that the regulatory advice and guidance had not been adhered to and there were serious regulatory concerns in relation to poor governance, poor financial controls, and recurring regulatory issues, including the ongoing use of personal bank accounts to transfer charitable funds overseas.

In consequence of these matters, on 6 July 2021, the Commission took the decision to open a statutory inquiry (the ‘inquiry’) into the charity under section 46 of the Act. The opening of the inquiry was publicly announced on 12 August 2021.

The scope of the inquiry, in broad terms, considered:

• the administration, governance and management of the charity by the trustees;
• financial controls and management of the charity including the transfer of charitable funds to personal bank accounts; and
• whether or not trustees have complied with and fulfilled their duties and responsibilities as trustees under charity law

At the time of the inquiry’s opening, there were three trustees of the charity:

• Mr Bhaiyat served as a trustee from 27 May 2011 to 17 April 2012, then again from 15 August 2012 to 31 January 2015, and then again from 15 June 2018 to 29 January 2024
• Mr Rehman served as a trustee from 16 October 2014 to 6 December 2014, and then again from 15 June 2018 to 16 December 2024
• Mr Sahad Khan (‘Mr Khan’) served as a trustee from 26 January 2021 to 22 May 2023

During the inquiry, Mr Sajid Ameen and Mr Mohammed Pervaiz became trustees of the charity on 20 December 2023 and 2 February 2024 respectively; both remain in their trustee positions.

Findings

The administration, governance, and management of the charity by the trustees

The inquiry found that the trustees, as they were at the relevant times, had not complied with the charity’s governing document and had acted outside the charity’s stated purposes. Furthermore, the inquiry found that the charity was not properly managed and had little governance infrastructure in place or policies or controls to assist the trustees to manage the charity properly.

Internal policies

As a result of the monitoring inspection in 2019 and 2020, the inquiry was aware the charity had implemented a number of policies – covering areas such as conflicts of interest, expenses, financial management, and safeguarding. However, given the charity’s size, income level, and the nature of its overseas work in high-risk areas with vulnerable beneficiaries, the Commission considers the policies should have been more comprehensive. For example, the charity’s financial management policy lacked procedures for holding or transferring charitable funds from the charity’s bank account and for sending charitable funds overseas. The lack of comprehensive policies, or other controls, to assist the trustees in managing the charity properly, contributed to the misconduct and/or mismanagement within the charity.

Additionally, throughout the inquiry the Commission sought to ascertain whether the trustees had followed the previous regulatory advice and guidance issued by the Commission to improve, create, and implement policies in relation to the charity’s activities. However, despite being compelled to provide these, in accordance with section 47 of the Act, the trustees did not produce them. The inquiry found that there was either a lack of written policies or in the alternative non-compliance with the directions on the part of the trustees. All charities should have appropriately tailored internal policy documents which address the specific risks associated with the kind of activities that are undertaken. A failure to implement internal policies (and follow them) can put assets, beneficiaries, and a charity’s reputation at risk. The failure to implement internal policies or in the alternative the failure to comply with a direction of the Commission is misconduct and/or mismanagement on the part of the trustees.

Compliance with the charity’s governing document

Clause 20 of the charity’s governing document states ‘The Trustees must keep minutes, in books kept for the purpose or by such other means as the Trustees decide, of the proceedings at their meetings. In the minutes the Trustees must record their decisions and, where appropriate, the reasons for those decisions. The Trustees must approve the minutes in accordance with the procedures, laid down in regulations made under clause 21 of this deed.’ The inquiry’s review of the trustees’ meeting minutes showed that they were limited in detail and did not adequately document the decisions made by the trustees and the reasoning behind them.

The trustees’ failure to keep sufficient records in this regard further highlighted the charity’s poor governance. The trustees’ failure to adhere to and follow the charity’s governing document is a breach of trust and is misconduct and/or mismanagement in the administration of the charity.

The trustees also failed to comply with clause 22 of the charity’s governing document, which relates to the filing of statutory accounting documents, further details are included in this report with regards to this breach.

Payment to His Majesty’s Courts and Tribunals Service (‘HMCTS’)

The inquiry found that on 5 May 2020, the charity paid £3,000 to HMCTS. The trustees informed the inquiry that the payment was to secure the conditional bail of an individual arrested by UK police for extradition to the Czech Republic. Due to COVID-19 travel restrictions, the extradition could not proceed as it would normally have done so hence conditional bail being granted. The charity raised funds specifically for the bail, with the understanding that the funds would be reimbursed if the individual complied with the conditions of their bail, including attendance at all required court hearings.

Before making the bail payment, the trustees claimed they had sought advice from the individual’s solicitor, but did not obtain independent legal advice on behalf of the charity. While the inquiry was given assurances that legal advice had been sought, the inquiry is critical that the trustees did not seek independent legal advice which would have considered whether this payment was in the best interests of the charity and in line with the charity’s objects. It is the inquiry’s view that relying on the individual’s solicitor presented a clear conflict of interest and was insufficient.   

Donors consented to the charity retaining and using any refunded bail amount for other projects. At the time of making the payment, the trustees were uncertain whether the charity would bear any future financial liabilities.

The inquiry found that by raising funds and paying the £3,000 for the individual’s bail, the trustees were acting outside of the charity’s stated purposes, thereby breaching their fiduciary duties and the governing document. The inquiry saw no evidence to demonstrate how the trustees considered the charity’s purposes or followed a proper decision-making process before making the payment. The payment also exposed the charity’s funds to risk, as if the individual did not attend court the charity would lose the funds. The Commission concluded that the trustees decision to make the payment is misconduct and/or mismanagement in the administration of the charity.

Late filings of annual accounting documents

It is the trustees’ legal duty and responsibility to ensure that the charity’s annual accounting documents, which consists of accounts, the trustees annual report, and a charity’s annual return, are filed on time in accordance with the Act and governing document. The inquiry found that the trustees filed the charity’s annual accounting documents with the Commission late, contrary to clause 22 of the charity’s governing document and sections 162, 163, 164 and 169 of the Act for the:

• Financial Year Ending 6 February 2019 (the annual accounting documents were filed 42 days late)
• Financial Year Ending 6 February 2021 (the annual accounting documents were filed 182 and 183 days late)

It is a criminal offence under section 173 of the Act to fail to file a charity’s annual accounting documents within the statutory 10-month deadline and is misconduct and/ or mismanagement by the trustees (as they were at the relevant times).

Financial controls and management of the charity, including the transfer of charitable funds to personal bank accounts

The inquiry found that the trustees had a complete disregard for, or lack of understanding of, the importance of proper financial controls and management in respect of the charity’s funds. This was particularly concerning given the prior regulatory advice and guidance issued by the Commission in 2019 on this matter, which should have prompted improvements in the charity’s financial practices. As set out above, while certain policies were implemented, the charity’s financial management policy lacked procedures for holding or transferring charitable funds from the charity’s bank account and for sending charitable funds overseas.

The inquiry understands that the charity had its banking facilities withdrawn by two banking providers. As a result of these closures, the charity opened a bank account with a provider who, after a period, no longer permitted the charity to make overseas transfers, and thus the personal bank account of Mr Bhaiyat was used to make such transfers. Noting that Mr Bhaiyat was a signatory to the charity’s bank account, the inquiry was unable to establish how the trustees were properly managing the conflict of interest given that the governing document requires two trustees to authorise payments.

At the relevant times when the transfers were made to Mr Bhaiyat, only Mr Bhaiyat and Mr Rehman, in accordance with the governing document, were capable of making payments as signatories to the bank account. If followed, this meant Mr Bhaiyat was directly involved in the process of authorising payments to his personal bank account. The inquiry saw no evidence that the trustees identified or managed this conflict, nor was any evidence provided to show that other alternative methods for transferring funds overseas were considered.

Despite the Commission’s 2019 regulatory intervention, which included providing advice and guidance concerning the use of personal bank accounts to hold and transfer the charity’s funds, including transfers overseas, the Commission found that between January 2018 and May 2020, the trustees allowed the transfer of 76% (totalling more than £151,000) of the Charity’s expenditure for the Financial Year End 6 February 2020 from the charity’s bank account to Mr Bhaiyat’s personal bank account, to facilitate overseas transfers via a regulated international money transfer company. The trustees failed to provide any evidence to explain why they did not use the charity’s bank account to make transfers directly to the international money transfer company, nor did the inquiry receive information showing why such payments were not permitted by its banking provider despite asking for evidence.

The Commission’s review of Mr Bhaiyat’s personal bank statements revealed issues with the handling of the charity’s funds. Some funds were left in Mr Bhaiyat’s account for several days or where amounts were not transferred to the international money transfer company in the same value which they were transferred into his personal bank account. This creates risks of potential misuse or loss of charitable funds, thus threatening the charity’s reputation.

The inquiry also found that the trustees failed to recognise the potential issues associated with the use of personal bank accounts to transfer charitable funds. This resulted in the inquiry exercising the Commission’s regulatory powers to restrict payments to the personal bank accounts of charity trustees and connected persons  – see ‘Regulatory action taken’ below for further details.

In conclusion, the manner in which the trustees operated in relation to the management of the charity’s funds is misconduct and/or mismanagement in the administration of the charity.

Whether or not trustees have complied with and fulfilled their duties and responsibilities as trustees under charity law

As set out in previous sections of this report, the inquiry found that there was misconduct and/or mismanagement in the administration of the charity by its trustees, as they were at the relevant times.

Overall, the inquiry is critical of the trustees, as they were at the relevant times, that substantive material pertaining to the inquiry was only provided to the Commission in June 2023 and May 2024. Had the material been provided earlier, the Commission’s engagement and regulatory action may have been different as the material alleviates some of the Commission’s regulatory concerns. The Commission and the courts expect trustees to cooperate with it as the regulator, it is therefore difficult to see why a prudent body of trustees would not fully cooperate with the Commission.

Consequently, the inquiry found that the trustees did not fulfil their duties and responsibilities as trustees under charity law.

Conclusions

Trustees play a crucial role in the governance of charities and are required to use their skills, knowledge, and experience to run their charity well and in its best interests. In this case, the Commission concluded that the trustees, as they were at the relevant times, failed to discharge their legal duties and responsibilities, leading to misconduct and/or mismanagement within the charity.

The Commission’s intervention in opening the inquiry and taking regulatory action was essential to restore proper governance and administration to the charity.

Regulatory action taken

On 6 July 2021, the Commission opened the inquiry into the charity under section 46 of the Act.

The inquiry exercised the Commission’s power under section 47 of the Act on multiple occasions both to obtain documents and answers to questions.

Immediately following the opening of the inquiry, an order was made on 6 July 2021 under section 76(3)(f) of the Act, which prohibited the trustees from entering into, without the prior written approval of the Commission, any of the following transactions:

• any transaction which would result in all or part of the charity’s funds being transferred to any of the charity’s trustees or connected persons, as defined within section 118 of the Act; or
• any transaction which would result in all or part of the charity’s funds being transferred to any of the charity’s overseas based partners, either individuals or organisations; or
• withdrawals of charitable funds in cash from the charity’s bank account or any other account held in the name of the charity

The order under section 76(3)(f) of the Act was made as the Commission was satisfied that there had been (i) misconduct and/or mismanagement in the administration of the charity, and (ii) it was necessary or desirable to act for the purpose of protecting the property of the charity or securing a proper application for the purposes of the charity of that property or of property coming to the charity.

On 18 May 2022, the inquiry exercised the Commission’s power under section 84 of the Act to direct the trustees to prepare the charity’s annual accounting documents for the Financial Year Ending 6 February 2021 and provide copies of these documents to the Commission by 8 June 2022. The trustees complied fully with the order.

On 9 August 2021, the trustees filed an appeal with the First-tier Tribunal (Charity) (the ‘Tribunal’) on behalf of the charity, challenging both the opening of the inquiry under section 46 of the Act and the order under section 76(3)(f) of the Act. The appeal was heard from 6 to 8 September 2022. On 14 February 2023, the Tribunal delivered its written decision, ruling that the Commission had lawfully exercised its powers under sections 46 and 76(3)(f) of the Act, and dismissed the appeal.

On 22 June 2023, following a review, the Commission took the decision to discharge the order issued under section 76(3)(f) of the Act. This decision was taken, in part, on the trustees’ assurances in response to a section 47 direction issued by the Commission, that the charity is operating exclusively within the United Kingdom.  The Commission explained to the trustees that if the position changes and the charity conducts activities overseas, the Commission expects assurances from the trustees of how they intend to transfer charitable funds overseas. The discharge of the order was made under section 337(6) of the Act.

Under section 15(2) of the Act, the Commission provided regulatory advice and guidance to the current trustees to further improve their administration and management of the charity. The Commission will monitor the trustees’ progress as part of post-inquiry supervision.

Issues for the wider sector

The purpose of this section is to highlight the broader issues arising from the Commission’s assessment of the issues raised publicly 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.

Governance

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 the individual trustees, the charity and possibly the wider charity sector.

All charities should have appropriately tailored internal policy documents which address the specific risks associated with the kind of activities that are undertaken. A failure to implement internal policies (and follow them) can put assets, beneficiaries, and a charity’s reputation at risk.

Moving charitable funds

Charity trustees are legally responsible for ensuring the charity’s money is used properly for legitimate charitable purposes and safeguarded from loss. Trustees must always act to protect charity property. Ensuring strong financial management procedures and proper internal controls, and applying a common-sense approach, will help trustees meet their duties. They also need to promote the transparency and accountability of their charity, particularly as regards its finances, which is so important for public trust and confidence in charities.

In most cases charities should use the regulated banking sector when transferring charitable funds. It is difficult to see, where regulated banking services are available, how trustees could show they discharged their legal duties if they do not use the regulated banking sector in order to secure the charity’s funds.

Charities must have robust financial controls in order to protect the charity’s funds. Charitable funds should not be transferred via personal bank accounts save for exceptional circumstances. There are significant risks to charitable funds if they are held in personal bank account, even where control measures are in place. This practice is not transparent or easily accountable.

The Commission has issued guidance for charities in respect of internal financial controls and holding, moving and transferring funds safely.