Regulator finds charity had terrorist links

The Charity Commission has published a report on its inquiry into the charity Sivayogam finding against its chair and connections with terrorist group Liberation Tigers of Tamil Eelam.

The charity runs two Hindu temples in London which provide religious facilities to the local Hindu, and in particular Tamil, communities.

In addition, the charity collects donations and sends these to educational or welfare organisations in Sri Lanka.

The Commission opened a statutory inquiry after a number of concerns were raised with the regulator about the application of the charity’s funds in Sri Lanka and the Charity’s governance arrangements.

In 2005 the Commission was contacted by two individuals who reported that whilst in Sri Lanka earlier that year, the Liberation Tigers of Tamil Eelam (LTTE) forced them to agree to transfer control of a Hindu Temple.

The temple was run by the Eelepatheeswarar Aalayam, and the complainants were part of this organisation's management team.

The charity then took daily control of the temple which raised potentially serious concerns about the independence of the charity, as there was evidence that suggested that a third party - in this case LTTE - may have affected the charity's decision to accept the transfer.

It was also alleged that the charity could not account for the proper use of all grants and donations it made to Sri Lanka, and that some funds went to the LTTE. This raised regulatory concerns for the Commission.

The Commission said: "The charity was unable to adequately demonstrate how funds sent to Sri Lank were used and monitored."

The Commission therefore, was not satisfied the charity was being managed properly.

The Commission also highlighted: "The level of trustee engagement fell short of that expected given the seriousness of the issues under investigation."

The Commission then removed Nagendram Seevaratanam as chair and trustee of the charity. He has subsequently won an appeal to be reinstated as a trustee.

As a result of the Inquiry, the charity has strengthened its financial controls to protect its funds from the risk of misuse or misapplication.

The trustees have conducted a review of the charity’s due diligence procedures in relation to international grants and donations, to ensure the more effective application of funds held and applied by the charity.

The implementation of guidance given by the Inquiry will strengthen the Charity’s financial controls and protect its funds from the risk of misuse.

The report contains a number of important wider issues for the charity sector.

It highlights the duties and responsibilities of charity trustees, in particular their duty to put in place and monitor proper governance and decision making procedures.

It also includes specific guidance relating to the duties of charity trustees when working internationally, and when operating interest-free loan schemes.