The charity regulator has launched a probe into one of Home REIT’s top tenants amid concerns over “potential unauthorised” benefits pocketed by the charity’s trustees.
In a statement today, the Charity Commission said it had launched an inquiry into Liverpool-based Big Help, which provides sheltered accommodation for vulnerable people, after identifying a “significant increase in its reported income” and concerns around “trustee decision making, potential unauthorised trustee benefit and unmanaged conflicts of interest”.
The commission said it opened a statutory inquiry into the charity on 7 December 2023 and “will examine the administration, governance and management of the charity”.
Among the areas of focus for the probe will be any conflicts of interests and whether “transactions with connected parties have been adequately identified and managed”, as well as whether the charity’s bosses received “any unauthorised trustee benefit”.
Big Help, run by former Labour councillor Peter Mitchell, was formerly among the biggest tenants on FTSE 250 Home REIT’s rent roll. Mitchell also ran two other organisations which collectively accounted for nearly a fifth of the fund’s total rental income.
The charity describes itself as a “leading Liverpool based charity that provides food, financial inclusion and advice services support to people in need across the Liverpool City Region”. In 2023, it won the Community Impact Award from the Liverpool Chamber of Commerce in what it said was recognition of its “outstanding contribution to the social and economic well-being of [Liverpool].”
The investigation however raises further questions of the governance and controls at Home REIT after a slew of scandals in the past year.
After Home REIT was hit by a damning short report in late 2022, the firm claimed that Big Help had paid its rent bill in full.
However, City A.M. revealed that the group had actually withheld £6m in rent from the firm between March and the end of August, prompting the threat of legal action between the two parties.
In a statement today, Big Help said it was “very disappointed to note the decision of the Charity Commission” and had “cooperated fully” with the investigation. The charity has also appealed against the investigation.
“We look forward to clearing up any issues raised during this process and are now exploring various legal channels through which we can do so,” the group said in a statement.
Home REIT itself was forced to call in forensic accountants at Alvarez & Marsal to investigate allegations of wrongdoing against its investment manager Alvarium last year.
A&M identified the existence of “certain undisclosed potential outside business interests and undeclared potential conflicts of interest as between certain persons associated with [Alvarium] and third parties”. There is no suggestion these are related to the investigation of Big Help.
Home REIT’s rental income has collapsed and a string of its biggest tenants have gone bust. Lotus Group, formerly its biggest single tenant filed for administration last year. In an update to the market this morning, Home REIT said it had collected just 10 per cent of invoiced rent for the month.
Home REIT did not immediately respond to a request for comment.