Pastor Ashimolowo’s KICC falls victim of Ponzi scheme, loses $4.8m
By Sewe Ishola
News have filtered in that the 12,000 member strong church, Kingsway International Christian Centre, in Britain headed by Nigeria’s Pastor Matthew Ashimolowo, lost $4.8 million of charitable funds to an investment, which later turned out to be a Ponzi scheme.
The trustees of the church had invested the amount of money in a scam was the brainchild of a former Premier League soccer player, Richard Rufus, who used to be a defender for Charlton Athletic. He was also a former trustee of the church.
According to an inquiry report published last week by the Charity Commission for England and Wales, the Kent-based Kingsway International Christian Centre came away with a net loss of about $4.8 million (£3.9 million) after its trustees put in a total of $6.1 million (£5 million) in four installments between June 2009 and June 2010 to Rufus, who guaranteed that the investments would earn a sizable return totaling about 55 percent in a year.
He was last year found guilty of defrauding about 100 investors out of a total of £8.7m in the £16-million investing scheme., however, Kingsway International Christian Centre was the single largest investor in the scheme.
The Charity Commission said in the report 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.
According to reports in The Christian Post, 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 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.