Charity Commission inquiry

We were contacted by the trustees of a grant making charity when it faced an inquiry by the Charity Commission into investments it had made.

A problem arose because one of the trustees - a professional investment adviser - had recommended that the charity invest in a private limited company through a series of loans and share purchases. This trustee had already invested his own money in the company. Subsequently, the value of the investment was written off in the charity's accounts.

We advised the other trustees on the law relating to the standard of care to be exercised when investing funds and the law concerning conflicts of interest.

With a guarantee secured from the trustee who had advised on the investment, including full disclosure to the Charity Commission of the circumstances in which it had been made, and an upturn in the fortunes of the company, the Charity Commission closed its inquiry.

Return to case studies