The East London Mosque has suffered a £1 million loss due to a failed investment, leading the UK’s Charity Commission to issue a formal warning to the mosque’s governing body.
The commission concluded that the trustees did not maintain adequate oversight of the mosque’s charitable activities.
If the East London Mosque Trust fails to take appropriate corrective measures within six months, it could face a full statutory inquiry.
Established in 1910 with support from the UK’s Muslim community, the mosque is a central institution for British Bangladeshis and one of the largest mosques in Europe. It is governed by a 12-member board, most of whom are of Bangladeshi descent.
Annually, the mosque generates between £4 and £5 million through Ramadan fundraising campaigns and various donation drives.
In 2022, the trust invested £1 million in MATZ, a medical equipment supplier approved by the NHS, expecting a 20% return within six months.
However, the company went bankrupt, resulting in a total loss of the investment. The trustees only informed the Charity Commission nearly a year later, in February 2023.
The commission’s investigation revealed that the trust did not conduct proper due diligence before investing. It also criticized the board for poor oversight and for failing to examine critical documents related to the deal.
The commission stressed that charities must carry out detailed checks before committing significant funds.
“When people donate to a charity, they trust that those managing the funds will do so with care and in line with the charity’s objectives,” said Joshua Farbridge, the head of compliance, inspections, and investigations at the Charity Commission.
“In this case, we found that the trustees failed to exercise the necessary oversight over a major investment and did not retain adequate information about the deal.”
“We have advised the East London Mosque Trust on its financial oversight multiple times, which is why we have now issued a formal warning,” Farbridge added.
