Trustees permanently banned after bungled property deal causes charity ‘significant losses’

Two trustees of a religious charity have been permanently banned for failures in the purchase and construction of a temple.

The property, which was bought for £160,000 by the Hindu Community Society via donations as well as loans, including a £100,000 commercial bridging loan, was to be used as a base for a temple for the Tamil community in Coventry.

A further £500,000 of donations were then used to build the temple.

But when the charity was unable to repay the bridging loan, the property was repossessed, a Charity Commission investigation has found.

This loan incurred interest of £5,000 a month. After six months the liability was £209,000, which the charity could not afford.

The regulator found that two trustees at the charity, Nathan Rahulan and Padma Rahulan, had “mismanaged the charity’s finances by obtaining finance to buy a property on terms the charity could not afford to repay, without consulting with the other trustees or seeking financial advice”.

Further mismanagement was found when Nathan Rahulan then spent a further £46,000 of the charity’s money on legal advice “in an unsuccessful attempt to regain ownership,” the regulator found. This was also done without consulting the other trustees.

Although the charity recovered “from the financial losses resulting from the Rahulan’s misconduct” it later closed and has now been removed from the charity register.

The failed property deal took place in 2012. Nathan Rahulan was removed as a trustee for the charity in March 2020 and Mrs Rahulan a year later.

Both have been permanently disqualified from acting as charity trustees.

“The two former trustees’ misconduct and mismanagement has caused significant losses to the charity and the local community it supported,” said Charity Commission head of investigations Amy Spiller.

“Their behaviour falls far below what we’d expect from trustees and hindered the charity’s work in the Tamil community.

“Charities exist to do good, and it is important that individuals are not able to hinder this good work, or misuse the public’s generous donations.”