UK family blew charity millions on cars, mansions and castles

Trustees lived ‘rent free’ at estate bought for charitable purposes

A British family spent years buying multimillion-pound historic properties under the guise of restoring them for the public's benefit.

But in reality, they lived in some rent free, while others were left to decay, leading to accusations the Smith family hoped to redevelop the prime locations.

They spent thousands on luxury cars, such as Bentleys, and unlawfully paid themselves large salaries at the charity's expense.

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The inquiry found that the trustees did not act in the best interests of the charity by living on the premises
The Charity Commission

Cyril Smith set up Manor Building Preservation Trust in 1999, which he registered as a charity in 2004 for the purpose of preserving "for the benefit of the nation, the historical, architectural and constructional heritage that may exist in buildings of particular beauty or historical interest".

Along with his son, property developer Matthew Smith, and daughter-in-law, accountant Mariya Smith, they were trustees of the charity.

But after an inquiry by the Charity Commission they have all been removed after evidence of serious misconduct was found.

The family set up the charity after the company bought the £7 million, 18th-century Great Barr Hall mansion and estate in Birmingham, central England, which the Smiths claimed they would restore and reopen for tourists.

Instead, the 18th century Gothic mansion, which was used as a meeting site for the UK's Lunar Society of inventors and scholars, was left to fall into disrepair amid accusations that expensive new homes could be built on the site.

In 2010, the charity bought Goldington Hall as a renovation project and, it said, a method of generating revenue for the charity.

But the inquiry found that Cyril Smith, Matthew Smith, Mariya Smith and other family members occupied the entire property rent free until the Commission went to court to evict them.

The household costs of Goldington Hall, including utility bills, phone and internet expenditure, were paid for by the charity and never reimbursed by any of the trustees who occupied the premises. This included £18,000 on power and £12,841 for phone and internet use.

It was found that up to £100,000 was spent on Bentleys and a Land Rover Discovery.

The inquiry also found that Matthew Smith and Mariya Smith paid themselves £128,017 in salaries for maintenance of Goldington.

"The inquiry found the restoration of the property was completed prior to December 2014 and there was no legitimate reason why the trustees and their family members continued to reside in the property after that date," the Charity Commission said.

"The trustees informed the inquiry that their occupation of the Hall acted as a form of security service; in that it was kept in use. However, an alternative security arrangement could have been implemented and the Hall opened to the public under the supervision of the charity.

"The inquiry found that the trustees did not act in the best interests of the charity by living on the premises and the property was being treated as their family home. This did not meet the objectives of the charity and constituted significant personal benefit."

The family spent £17,655 of the charity's funds on their own entertaining expenses, £20,300 on travel and subsistence and £31,220 on professional advice regarding the potential development of a plot of land owned by one of the trustees, the inquiry found.

The trustees also spent thousands on an unsuccessful effort to buy the 9th century Lachar Castle in Granada, Spain, where authorities stepped in to prevent the purchase.

"When asked by the inquiry, the trustees were unclear as to whether the purchase was intended to further the charity’s objects or to acquire an investment property," the Charity Commission said.

"No evidence was provided to the inquiry to demonstrate the trustees had sought any investment advice in relation to the purchase of this property. In addition, the inquiry noted that the purchase of a property in Spain would not be in furtherance of the charity’s objects, given they are restricted to preserving property in a domestic as opposed to international setting."

The trustees also spent more than £100,000 to buy two properties in Ukraine.

"The Commission concluded that there was serious misconduct and/or mismanagement in the charity’s administration and management," it said.

"There was evidence of significant personal benefit with the trustees living at the Hall and the property was being treated as their family home."

The Commission removed the family as trustees and shut down the charity.

Updated: November 3rd 2021, 3:30 PM
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