Charity declared bankrupt owing more than £1 million

Bankruptcy Blog

A charity has been declared bankrupt after an investigation found that it spent just 13p in the pound on charitable causes.

The Charity Commission launched an inquiry into Scotia Aid Sierra Leone after a whistleblowing trustee reported widespread misuse of funds at the organisation.

The whistleblower said the directors were paying themselves huge fees at the expense of the cause they were meant to support.

The Charity Commission placed an interim freezing order on the charity’s bank accounts and barred directors Kieran Kelly and Alan Johnston from running any charity for life.

It said the former chairman, which left the charity before the investigation began, had paid himself £104,000 in “consultancy fees”.

The investigation also revealed that just 13p in every pound was being spent on charitable activities, while payments to companies connected to trustees were “excessive” and “not sufficiently explained”.

The charity was served a bankruptcy order in June owing more than £1.1 million to creditors. It was later revealed that the charity’s total assets were worth just £2,348.

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