The Charity Commission has now confirmed that it has opened a statutory inquiry into the charity, which is the highest level of probe under the regulator's remit.

The charity is the main organisation in a network of charities and legal entities around the world which have estimated assets of up to £100 million, with most of the funds coming from the UK.

It is feared that there could be a £15 million hole in the group's finances, internal documents show.

The allegations have emerged amid a major split at the organisation which has seen three of the founding members suspended and the dismissal of Noel Frost, its international CEO, who was on the side of the divide.

Amid the fracas and allegations of a "toxic culture" created by charity founder the Rev Dr Patrick Sookhdeo, a law firm was brought in to investigate claims including financial impropriety.

The interim report, seen by this newspaper, details how Mr Frost 47, used charity cards to pay for flights, bikes, electronics and to transfer more than £130,000 into accounts linked to him personally.

He told investigators that the flights were paid for in error and denied transferring money into his personal accounts. Investigations are ongoing.

Mr Frost was dismissed after it emerged that he had been struck off as a solicitor in his native South Africa for defrauding his clients just months before taking the promotion to CEO.

Lord Simon Reading, 82, is also facing questions over the £50,000 payment to pay for proposed defamation proceedings after he was caught in an undercover sting offering to sell access to the Kremlin through Prince Michael.

In response to the article, Prince Michael said he had had no contact with Putin since 2003 and made "suggestions" which he "would not have wanted, or been able, to fulfil". Lord Reading said that he "made a mistake and over-promised".

Charity payments to Lord Reading running into six figures including for rent, hearing aids and a car are also being examined by the legal team. He disputes the figures and is cooperating with the investigation.

Dr Sookhdeo and his wife Rosemary are being asked to explain £1.3 million they are accused of receiving.

A Charity Commission spokesperson said: "On Tuesday 17th September, our engagement with Barnabas Fund (Also known as Barnabas Aid) was escalated to a statutory inquiry. In line with our usual policy, we will publish a public statement setting out the scope of our inquiry in due course."

A spokesman for the charity said: "The independent investigation has been going on for months and we welcome the Charity Commission's statutory inquiry into activities that happened in the past. We will continue to work closely with the commission."

Caroline Kerslake, one of the founding members, wrote to the regulator on Sunday, saying: "The founding leaders are determined to stop anyone depleting charitable funds which we have built up over the decades for the service of those truly in need."

She said that they are "willing to co-operate with any genuinely impartial investigation into the charity", adding that the money to the Sookhdeos "was over the course of more than three decades and mostly in ring-fenced donations from supporters made specifically for the Sookhdeos, in lieu of salaries".

***

Public letter from a Barnabas Aid Co-Founder to the Charity Commission

September 24, 2024

In the wake of the coverage of the charity in the Telegraph this weekend I am writing this public note. Barnabas Aid is a faith charity that is sometimes heavily reliant on goodwill and volunteers, but we have always sought to comply with charity law and the guidance of the Charity Commission.

Firstly, I wish to thank the Charity Commission for seeking to understand what has been going on in the £100 million Barnabas alliance of charities and to stabilise the management of Barnabas Aid.

There are multiple problems that remain including a US company's attempt to gain control of the funds of this UK charity through Lord Reading. His position as a trustee is compromised by his financial conduct.

As our lawyers informed you in May, the appalling nadir of these problems was that a fraudster became international CEO of the alliance. A fox took charge of the hen house.

That fraudster is the South African lawyer Noel Frost. Investigators working for my fellow trustee, the RAB Capital founder Philip Richards, found out in May that two years ago Mr Frost had been struck off as a solicitor by the High Court in South Africa for fraud and using forged documents to extract money from a client. The judgment said Mr Frost was a "grossly dishonest individual who is a threat to the public and a disgrace to the profession." [1]

In striking off Mr Frost, the South African High Court asked for a warning to be sent to the UK legal authorities where they suspected Mr Frost had moved to. The fraudster had indeed fled to the UK where, in 2023, he convinced the board of Barnabas Aid to give him the post of international CEO, without disclosing his disbarment.

There is prima facie evidence that in this role he continued to conduct fraud. Investigators have raised concerns that £15m may be missing from accounts and that Mr Frost has been "refusing to provide updated records". [2]

In January, I was one of the founding leaders who were putting pressure on Mr Frost to provide basic financial data. [3] In February we were alerted to a campaign organised by Mr Frost to push us out of our roles as he apparently sought to cover his tracks. [4]

He executed this plan by orchestrating complaints against us founders. To this end, Mr Frost used charitable funds to seek to induce loyalty among staff. These included paying for a trip for staff members to Las Vegas out of charitable funds. [5]

Mr Frost fostered conflict between us and other trustees who were still taken in by him: they told us, the founders, that we would have complaints against us dropped if we resigned immediately. [6] Eventually, the other trustees hired security guards to lock us out of our head office. This is mafia-style behaviour, not the conduct of responsible trustees in modern Britain. Their shutting us out of the computer systems has made it difficult for us to inform you about what has been going on. [7]

Before we the founders helped unearth the horrifying scale of Mr Frost's fraud, the US company, Nexcus, continued to back him. For example, I was astonished that, in April, the Nexcus trustee Lord Reading [ other trustees are Rev Michael Hewitt. New Zealand. -- also chair of GAFCON NZ, Rev Ian Clarkson. Australia, Mr John Marsh. USA Ed.] passed on to Mr Frost a whistleblower document about Mr Frost's behaviour even though it was marked "confidential". [8] Lord Reading also saw fit to downplay Mr Frost's disbarment, telling staff, after Mr Frost had been suspended, that they should expect him to return to his position. [9]

There remain concerns about the legality of our ousting from Nexcus, their appointment of Colin Bloom as CEO and their hiring of Crowell & Moring to investigate us the founders. [10]

The Crowell lawyers are expert in fraud -- no doubt full of integrity. So, it is ironic that they are in effect implementing the strategy set in place by Mr Frost by which he sought to create a smokescreen for his fraud by accusing and removing us, the founding leaders, who were demanding he provide updated accounts.

The Nexcus board's agenda for targeting the founding leaders may include a desire to divert attention from their own failings and to gain control of the board of the UK charity Barnabas Aid. Colin Bloom also has his new five-year contract to defend.

I note that Crowell is employed by these Nexcus trustees and that is bound to impact its attempts to be independent in its investigation. For instance, its interim report reflected Mr Bloom's desire to minimise the wrongdoings of his ally Lord Reading when Crowell acknowledged that it was "instructed by Nexcus' new CEO, Colin Bloom that Lord Reading has been unfailingly cooperative".

Yet Crowell's professionalism meant that it did not downplay how Lord Reading diverted £50,000 paid to him expressly for legal fees (to defend him regarding a Sunday Times investigation over his Kremlin links) to "cover rent payments". [11]

Turning back to Mr Frost, it was only after we pointed to the overwhelming evidence about Mr Frost that Crowell added him to their terms of reference. [12] Mr Frost -- one of Crowell's own profession -- had gone rogue.

A particular puzzle relates to a letter Crowell wrote to Barnabas lawyers the day after investigators working for my fellow trustee, Mr Richards, had uncovered the South African High Court records showing Mr Frost's appalling past. Crowell urged us not to talk to the Charity Commission saying that Mr Frost should instead be given a "right to reply". [13]

This is extraordinary. This was not a humdrum allegation: it was a finding of fact by a High Court including an excoriating assessment of the character of the man who had gone on to become the CEO of the UK-based charity. The Charity Commission says it is a duty for trustees to promptly inform it of "serious incidents" -- and this easily exceeded that threshold.

I had informed the Nexcus trustees about the High Court documents on May 9. The same day Nexcus told us that the documents were "truly shocking". But the next day their lawyers, Crowell, told us not to contact the Charity Commission about Mr Frost. This demands an explanation. When did the Nexcus trustees send the documents to their lawyers? And when did they send them to the Charity Commission?

I am also perplexed that, in August, Crowell said that it was "unable to verify" the court documents about Mr Frost that had been discovered by Mr Richards in May. [14] We had for months pointed out the wrongdoing of Mr Frost when Nexcus trustees were prepared to look the other way. It is likely that without our efforts he would still be in place.

We understand that the Nexcus board want to protect their reputations. They are Crowell's client and no doubt authorising vast amounts of charitable funds to be paid to it.

The founding leaders are determined to stop anyone depleting charitable funds which we have built up over the decades for the service of those truly in need. We are willing to co-operate with any genuinely impartial investigation into the charity. We do not think that Crowell fits this bill.

This US law firm will no doubt flag up that my co-founders Patrick and Rosemary Sookhdeo were given £1.3 million. What they may not highlight is that this was over the course of more than three decades and mostly in ring-fenced donations from supporters made specifically for the Sookhdeos, in lieu of salaries. I note that Crowell has said that it has not found "evidence of wrongdoing" to justify my "removal from the charity." [15]

It would have been better if Crowell had stopped Mr Bloom from writing defamatory letters to the charity's 95,000 supporters. In them, he lumps together Mr Frost with the founders who had exposed Mr Frost. This has created further legal risk for the charity. [16]

I therefore ask you:

to decide whether you should report Mr Frost to the police
to determine whether you are comfortable with the delay in you being informed of a grave judgment by a High Court against a major charity CEO
to find out how much Crowell has charged from charitable funds
to consider whether the conduct of Lord Reading and Mr Bloom disqualify them from continuing in their roles
to ask the Solicitors Regulatory Authority whether they were informed of the disbarment of Mr Frost and, if so, what action they took
to make recommendations to the Government that they institute an international register of disgraced and disbarred individuals so that our national institutions are protected from their depredations
to review whether charitable groups which reach certain assets milestones should be compelled to have governance reviews
Kind regards,

Caroline Kerslake
Co-founder, Barnabas Aid

[1] South African High Court ruling disbars Noel Frost as solicitor for being "grossly dishonest", with the instruction the Solicitors Regulation Authority for England and Wales should be informed. See pages 2,3 and 4, BT 220603 South Africa High Court striking order

[2] Possible major hole in accounts: "A potential hole had been identified in the Barnabas accounts of circa $20m" with Frost "refusing to provide updated records". See paragraph 313 BT (on page 87) 230813 Crowell Interim Report. Examples of alleged personal use of funds by Frost include paragraphs 337, 338, 339, 352, 356 and 360

[3] In January 2024 Frost is saying why he cannot provide up to date financial information BT 240110 Email from Frost headed "Financial Reports"

[4] In February 2024, Frost alleged to be attempting to oust founding trustees: see allegations in BT 240203

[5] In January 2024, Frost paid for Barnabas colleagues to go to Las Vegas using the company credit card, paragraphs 330, 331 and 340(B) of BT 240813 Crowell Interim Report. In addition, a Barclays Bank executive referring to an earlier alleged fraud at Barnabas by Frost said, "I have never heard a more spurious explanation" -- see paragraph 354 of BT 240813 Crowell Interim Report

[6] In April 2024, a trustee urged the founding trustees to resign from being "IDs" (International Directors) saying that "WBs" (whistleblowers) would then "withdraw their complaints" paragraph 2: BT 240410 Hewat to Kerslake

[7] On 23 April 2024, the main site of the Barnabas charities was taken over by guards provided by the Nexcus Board. Patrick and Rosemary Sookhdeo and Caroline Kerslake were escorted from the premises and locked out of the computer systems

[8] Allegation that trustee Lord Reading had sent to Noel Frost a confidential whistle-blower disclosure: a) "Caroline Kerslake enquired whether any of the Board members had forwarded to the International CEO the confidential documents about and by "X" which she had circulated to Board members prior to the meeting. Simon Reading said that he had done so." paragraph 4, Nexcus board unapproved minutes, BT 240411. See also b) "On 14 April, Mr Phillips sends an email to the Barnabas Aid Limited board requesting an urgent board meeting as a result of an alleged breach of confidentiality by Lord Reading." See paragraph 408, BT 240813 Crowell Interim Report

[9] After hearing that Frost had been disbarred as a solicitor, the chairman of the board, Lord Reading told a staff meeting that: "Noel has less serious allegations against him than the founding trustees ... we hope that he will be back shortly." See Lord Reading speech: BT 240508 ANON report on Barnabas staff meeting 8 May 2024 page 1 of 2

[10] a) "24 April 2024, Colin Bloom was approached by a majority of trustees of Nexcus to take on the role of Interim CEO of Nexcus to oversee all operational, managerial and legal processes, and facilitate an independent investigation of the whistle-blower complaints."
See paragraph 33 of BT 240625 Nexcus Position Paper by Colin Bloom
b) "Mr Colin Bloom (appointed on 15 May 2024)". See paragraph 21.1 BT 240625 Nexcus Position Paper

c) "Mr Bloom approached Crowell upon his engagement by the Nexcus trustees that same week to act as legal advisers and to lead the investigation. Both Mr Bloom's and Crowell's appointment were ratified at a meeting of Nexcus's Trustees on 9 May 2024 at which Dr and Mrs Sookhdeo and Ms Kerslake were all present." See paragraph 35 BT 240625 Nexcus Position Paper. The founders were unable to hear this section of the Zoom call and would have voted against
[11] Regarding the irregular payments to Lord Reading, Crowell says "We are instructed by Nexcus' new CEO, Colin Bloom that Lord Reading has been unfailingly cooperative and helpful." See paragraph 182, BT 240813 Crowell Interim Report

[12] On 10 May 2024 Crowell write to Charity Commission a letter details their investigation into the founding trustees and at the end refers to the disbarment of Frost as merely part of "Further matters". See paragraph 15, BT 240510 Crowell to Charity Commission

[13] Crowell urged Barnabas Aid not to inform the Charity Commission about allegations against Frost. "We firmly believe that Mr Frost should be afforded the right to reply to the allegations made against him before any reports are made to regulatory authorities. Please can you liaise with your clients and seek their confirmation that no report will be made to the Charity Commission until our investigation is complete." Paragraph 3, page 1 of BT 240510 Crowell to Barnabas lawyers

[14] In August Crowell said of Frost's striking-off in South Africa "We have been unable to verify the position." See paragraph 336 on page 93 of BT 240813 Crowell Interim Report

[15] Crowell is investigating the use of charitable funds by Patrick and Rosemary Sookhdeo. See paragraphs 129-132;149,158,160-162 in BT 240813 Crowell Interim Report. For Caroline Kerslake see paragraph 101

[16] Bloom wrote to the donors about "Serious allegations against senior figures at Barnabas Aid: Patrick Sookhdeo (International Director), Caroline Kerslake (International Director of Projects), Prasad Phillips (Deputy International Director), and Noel Frost (then CEO). In April 2024, these individuals were suspended pending investigations by an independent third-party law firm." Colin Bloom email to supporters, see paragraphs 2 and 3 of BT 240907