Nigeria’s Pastor Mathew Ashimolowo, the head of Kingsway International Christian Centre, a 12,000-member megachurch
in Britain, has lost $5
million to a Ponzi scheme after trustees carelessly invested money in
it
The scam was the brainchild of former Premier League soccer player,
Richard Rufus, who used to be a defender for Charlton Athletic. He
promised investors along with the church a return as high as 55 per
cent.
The Christian Post reporting the findings of an inquiry published
14 December by the Charity Commission for England and Wales revealed
that the Kent-based 12,000 members Christian Centre suffered a net loss
of about $4.8 million (£3.9 million) after its trustees invested over
$6.1 million (£5 million) in four instalments between June 2009 and June
2010 . Mr. Rufus was a member and former trustee of the church
Mr. Rufus had guaranteed that the investments would earn a sizeable
return totalling about 55 percent in a year.He was last year found
guilty of defrauding about 100 investors out of a total of $10,731,159
(£8,682,343) in the £16-million investing scheme
Kingsway International Christian Centre was the single largest investor in the scheme
The Charity Commission said in the report that the church’s
trustees handed over an initial investment and entered into an agreement
in which they were guaranteed that investment would earn a profit of
about five percent per month, with the exception of August and December
when they were guaranteed profits of about 2.5 percent.
“The inquiry established that in practice, however, the investments resulted in a net loss of £3.9 million to the charity,” the report explains.
The report states that the church’s trustees who handed over the funds were guilty of “mismanagement.”
The commission found that the church’s trustees did not “exercise
sufficient care when making the decisions to invest £5 million of the
charity’s funds through the ex-trustee’s investment scheme.”
“They did not follow all the principles expected of trustees to
ensure they comply with their trustee duties under charity law when
making those decisions,” the report said.
The Charity Commission was first alerted to the church’s investment
when it found that the church made £3 million of investments with a
“qualified independent trader” who was “in a position to provide the services of an investment manager by investing in financial markets.”
After the commission contacted the Financial Services Authority to
verify the trustee’s status as a trader, it found that the trustee in
question was not, nor had he ever been, licensed to “carry on regulated activities in a personal capacity.”
The commission also found that the investments were paid to the
trustee’s personal bank accounts. Additionally, the commission found
that the investments “appeared to be speculative and high risk in nature.”
As a result of the commission’s inquiry, an interim manager was
appointed to review the trustees’ decisions to invest the £5 million and
to decide whether any of the trustees should be held personally liable.
The interim manager found that the trustees did not do enough to
investigate whether or not the rate of return they were promised was
realistic and put too much trust in the trustee’s good standing with the
church and community.
“The interim manager found that conflicts of interest were not
managed properly by the decision-making trustees when making the
decision to invest.
"There was too much reliance on the expertise of the ex‑trustee when he was personally interested and conflicted,” the report states.
“The interim manager found that insufficient consideration was
given by the decision-making trustees as to whether the guaranteed rate
of return was unrealistically high, or to the potential for fraud.”
After the church entered into an Individual voluntary agreement
with the ex-trustee in hopes he could pay back the money lost, the
ex-trustee filed for bankruptcy and was declared bankrupt in 2013.
The interim manager also encouraged the church’s current trustees
to bring a legal claim against the trustees who decided to invest the
money.
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- NAN
Nigeria Pastor, Ashimolowo lost $5 Million to a Ponzi Scheme, promising 55 percent return in one year
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