Inquiry found severe mismanagement in the Sri Veeramakaliamman Temple

Background

1. Pursuant to section 8 of the Charities Act (“the Act”), the Commissioner of Charities (“COC”) had on 22 August 2017 instituted an Inquiry into the Sri Veeramakaliamman Temple (“the Charity”).  The COC has also been notified by the Commercial Affairs Department (“CAD”) that it is investigating into the financial affairs of the Charity for suspected criminal offences.  Separately and independently from CAD, the COC has concluded his Inquiry and decided to take actions under the Act.

Key inquiry findings 

2. The COC Inquiry revealed severe mismanagement in the administration of the Charity during the period 1 January 2011 to 31 July 2014, in particular, by the following Management Committee members of the Charity (collectively known as “the Key Office Bearers”), who were the cheque signatories and approvers for payments: 

3. The COC noted severe lack of care and prudence by the Key Office Bearers in the discharge of their duties as Management Committee members and guardians of the Charity's charitable assets.  The Inquiry noted instances where the Charity's funds and charitable assets were placed at undue risks due to the Key Office Bearers' failure to exercise adequate care and prudence in their governance and financial management of the Charity.

4. For instance, the Key Office Bearers had prevalently issued uncrossed cheques and allowed uncrossed cheques to be exchanged for cash in the Charity's premises.  Between 1 January 2011 to 31 July 2014, the Charity issued uncrossed cheques totaling more than S$1.5 million, among which 45 cheques in excess of S$227,000 were not issued to the names of the intended recipients of the proceeds.

5. The Inquiry further revealed that Kumar had obtained loans of S$350,000 without the Management Committee's approval and with no written loan agreements with the lenders.  There was limited supporting evidence to substantiate that cash proceeds from these loans were disbursed to all of the intended recipients. These cash loans and disbursements of proceeds from the loans were also not properly accounted in the Charity's accounting records.

6. In addition, the Inquiry noted serious issues of conflict of interest. Kumar was one of the approving parties to the Charity's transactions of more than S$750,000 with two vendors owned by his relative.  Further, the Charity had reimbursed Kumar for purchases from Kumar's personal business.  There were no documented policies or procedures in place relating to declarations of actual or potential conflicts of interest.

7. The Inquiry also revealed severe deficiencies in the financial governance and controls of the Charity.  There were no documented policies and procedures within the Charity's finance function to provide guidance to the Management Committee members and employees on how their duties were to be discharged.  While it was represented that all policies and procedures were purportedly verbally agreed and communicated, internal controls within the Charity were near non-existent.

8. Arising from the absence of policies and procedures, neither the Charity's Management Committee members nor employees were able to oversee and operate the Charity's financial controls reliably and consistently.  There was also nothing to mitigate the risk of Management Committee members or employees improvising the policies and procedures over time in an ad-hoc manner.  The details of the main areas of mismanagement as extracted from the Inquiry Report dated 19 March 2018 are provided in

   Annex A [PDF, 134 KB]

   . 

Actions by the COC to safeguard charitable assets 

9. The COC is deeply concerned about the severe mismanagement in the administration of the Charity, particularly by the Key Office Bearers, and is of the view that Selvaraju, Siva and Kumar should be barred from their office in the Charity.

10. Given the gravity of the Inquiry findings, under the Act and with the consent of the Attorney-General, the COC has suspended Siva from the exercise of his office as governing board member and trustee of the Charity with immediate effect.  For as long as Siva is suspended, he is prohibited from taking part or being involved in managing the Charity, representing the Charity on any matters, or attending any of the Charity's Management Committee meetings.  Concurrently, the COC intends to remove Siva from his office as governing board member and trustee of the Charity under section 25(1)(i) of the Act.

11. With regard to Kumar, the COC is of the view that Kumar should also be barred from his office in the Charity in light of his involvement in the mismanagement in the administration of the Charity.  It has come to the COC's attention that Kumar has been previously convicted of criminal offences involving elements of dishonesty.  This renders him disqualified from acting in the capacity of a governing board member, key officer or a trustee for a charity by reason of section 27(1)(a)(i) and 27(2) of the Act, thus barring him from having general control and management of the administration of any charity.  By virtue of the disqualification, Kumar is effectively removed from and cannot hold any governance or management positions in the Charity.

12. In respect of Selvaraju, he is no longer a governing board member, trustee, key officer, employee or agent of the Charity since 20 November 2016.  The COC will not hesitate to take action against Selvaraju should he resume any office in the Charity.

13. To ensure the proper administration of the Charity moving forward, the COC has, with the consent of the Attorney-General and assistance from the Hindu Endowments Board, appointed 3 additional governing board members to the Charity under the Act.  These individuals are tasked to put in place proper board governance and internal controls in the Charity.   

Invitation of Representations 

14. Pursuant to section 29(2) read with section 29(1) of the Act, the COC is hereby giving a public notice of the COC's proposal to remove Siva from his office in the Charity.  Pursuant to section 27(6) of the Act, removal of an individual as governing board member, trustee, or key officer will disqualify that person from taking up such positions in any charity in the future. 

15. In light of the above, the COC would like to invite representations from the public to be made to him on his proposal to remove Siva from his office as governing board member and trustee of the Charity. 

16. For the purpose of making representations in relation to the COC's proposal to remove Siva from his office as governing board member and trustee of the Charity, should any person with specific information that can affect the findings wish to be granted access to the Inquiry Report, he should write in to the COC, providing his full reasons for the request.  The COC may at his sole discretion grant such requests if the COC is satisfied that there are good and sufficient reasons for giving that person access to the Inquiry Report. Any person granted access must agree to the terms and conditions imposed by the COC for such access.

17. The operations and daily services of the Charity will continue as usual.