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Conflicts Of Interests And Charities

On 12 December 2013 the Charity Commission published a report in relation to its investigation into Mayfair Charities Limited (Registered Charity Number: 255281). The charity, Mayfair Charities Limited, supports the activities of Jewish organisations, especially those in the field of education and the relief of poverty. A statutory inquiry was opened by the Commission in July 2012 following concerns in relation to a complex network of property related financial arrangements between the charity, its trading subsidiaries and companies connected to the trustees. As part of its inquiry the Commission reviewed various financial transactions. The Commission did not identify any significant failings in the administration of the charity. The Commission did, however, raise concerns in relation to a repaid loan by a company connected to the trustees to a non-charitable trading subsidiary of the charity. The Commission’s view was that it was difficult to see how the transaction could have been dealt with in a truly arm’s length way when the companies had common directors and the directors were also two of the three charity trustees.

Following the inquiry, the trustees of Mayfair Charities Limited have agreed to appoint at least one new trustee who is fully independent and unconflicted to address this issue. The Commission’s report is a useful reminder to all charities of the importance of identifying and properly managing conflict of interest situations. The Charity Commission is expected to publish revised guidance on conflicts of interest later this year.

If you have any queries in relation to this inquiry or conflicts of interest generally, please contact Rachel Brown, Solicitor in Druces’ Litigation and Dispute Resolution team. Rachel is a member of Druces’ Charity Group

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