CHURCH FOUNDER |
Kingsway International Christian Centre, a 12,000-member megachurch in Britain headed by Nigerian Pastor, Mathew Ashimolowo, lost $4.8 million to a Ponzi scheme after trustees carelessly invested money in it.
The scam was the brainchild of former Premier League soccer player, Richard Rufus. Rufus was a defender for Charlton Athletic. He promised investors along with the church a return as high as 55 per cent.
The Christian Post, reporting the findings of an inquiry published on December 14 by the Charity Commission for England and Wales
revealed that the Kent-based 12,000 member Christian Centre suffered a
net loss of about $4.8 million (£3.9 million) after its trustees
invested over $6.1 million (£5 million) in four installments between
June 2009 and June 2010. Rufus was a member and former trustee of the
church.
Rufus had guaranteed that the investments would earn a sizeable
return totaling about 55 percent in a year. He was last year found
guilty of defrauding about 100 investors out of a total of $10,731,159
(£8,682,343) in the £16-million investing scheme.
READ MORE AFTER THE CUT.........................
Kingsway International Christian Centre was the single largest investor in the scheme.
The Charity Commission said in the 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
explained
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 concluded.
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.
The interim manager found that the trustees did not do enough to
investigate whether or not the rate of return they were promised was
realistic and put too much trust in the trustee’s good standing with the
church and community.
“The interim manager found that conflicts of interest were not
managed properly by the decision-making trustees when making the
decision to invest. There was too much reliance on the expertise of the
ex‑trustee when he was personally interested and conflicted,” the report
states.
“The interim manager found that insufficient consideration was given
by the decision-making trustees as to whether the guaranteed rate of
return was unrealistically high, or to the potential for fraud.”
After the church entered into an Individual voluntary agreement with
the ex-trustee in hopes he could pay back the money lost, the ex-trustee
filed for bankruptcy and was declared bankrupt in 2013.
The interim manager also encouraged the church’s current trustees to
bring a legal claim against the trustees who decided to invest the
money.
Read the full report HERE.
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