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Church of South India Trust Association fails government audit: The Church of England Newspaper, June 10, 2012 p 6. June 12, 2012

Posted by geoconger in Church of England Newspaper, Church of South India, Corruption.
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An environment conducive to fraud and corruption surrounds the business practices of the Church of South India (CSI), a government investigation has found. A report prepared by auditors from the Indian government’s Registrar of Companies (RoC) listed 27 violations in the management and practices of the Church of South India Trust Association (CSITA).  Unless reforms are immediately implements, the trust that holds title to the church’s property may be liquidated or lose its not-for-profit status.

Charted as a not-for-profit corporation under Section 25 of the Indian Companies Act of 1956, the CSITA is not required to register a minimum share capital, need only maintain business records for the previous four years, and may increase the number of company directors without prior government approval.  In return, the CSITA is required to use its income for the furtherance of the mission and ministry of the CSI and not distribute dividends to its members.

In a report dated 22 May 2012, the RoC notified the members of the CSITA’s management committee that it had concluded the CSITA’s income was not being used for furthering the objects and purposes of the trust.  The Balance Sheet and Income Expenditure statement of the CSITA for the last four years “do not give a true and fair view of the state of affairs of the company,” the RoC report said.

Nor were transactions properly recorded, the report said as “no details of fixed assets/immovable properties, secured loans, sale of property, sale consideration, purchase of property, receipt of foreign contribution, income and expenditure of other dioceses, units or sub-units reflect in the Balance Sheet and books of accounts of the company.”

The CSI has been plagued by financial scandals in recent years with only “8 or 9” of its 21 current bishops untainted by corruption charges, the lay-led anti-corruption group, the CCC has reported.  Lay leaders have pushed for greater transparency from the bishops and executive committee of the general synod, but have so far been unable to receive an accounting.

On 1 Feb 2010, Dr. John Dorai, the general secretary of the CSITA Beneficiaries Association – a lay advocacy group in the church – filed a complaint requesting the RoC examine the accounts of the CSITA.  The CSITA, through the its secretary, M.M. Philip – who also serves as General Secretary of the CSI – fought the request through the courts.  However in a ruling released on 22 March 2012, Justice S. Rajeswaran of the Madras High Court ordered the CSITA to turn over its records to the RoC.

“Now we know why the CSITA tried so hard to prevent the RoC from doing its statutory duty,” the CCC said after the report was released, stating it was a “scathing indictment of how the church leadership (mis)manages the CSITA.”

“Given the seriousness of the violations unearthed by the RoC, the CSI leadership has no choice now but to put in place mechanisms to adhere strictly to the provisions of the Companies Act,” the CCC said, noting that “any continued violations could attract more stringent penalties including imprisonment.”

The CSITA did not respond to our requests for comments.  But it has been given 10 days to review the findings of the RoC and to offer comments or corrections.  If none are forthcoming the report will be finalized by the RoC.

First published in The Church of England Newspaper.

CSI ordered to open its books: The Church of England Newspaper, March 30, 2012 p 7. March 29, 2012

Posted by geoconger in Church of England Newspaper, Church of South India, Corruption.
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Anti-corruption activists scored a significant legal victory in India after the Madras high court ruled the trust that holds the assets of the Church of South India (CSI) was a corporation under the Companies Act and must submit is financial accounts for inspection.

In a ruling dated 1 March 2012 but released on 22 March, Justice S. Rajeswaran held the Church of South India Trust Association (CSITA) must turn over its records to the government’s Registrar of Companies (RoC) for inspection.  A spokesman for the CCC (Christ Centered Campaign) applauded the decision saying the anti-corruption coalition believed that in light of the church’s stonewalling of past government queries into the misuse of funds, “there is little doubt the RoC will now conduct an aggressive inspection of the CSITA which will result in a lot of skeletons tumbling out of its cupboard.”

Long plagued by financial scandals only “8 or 9” of the CSI’s 21 current bishops are untainted by corruption charges, the CCC has reported.  Lay leaders have pushed for greater transparency from the bishops and executive committee of the general synod, but complain of being stymied by the church.

On 1 Feb 2010, Dr. John Dorai, the general secretary of the CSITA Beneficiaries Association – a lay advocacy group in the church – filed a complaint requesting the RoC examine the accounts of the CSITA.  The CSITA, through the its secretary, M.M. Philip – who also serves as General Secretary of the CSI – responded by saying Dr. Dorai had no standing to press his case.

“The complainant Mr John S. Dorai is not a member of the CSITA and is a stranger and as such any representation by a stranger is void,” Mr. Philip told the RoC and stated the complaint should be “brushed aside and needs to be disposed off without any merit.”  However, on 1 Aug 2011, the RoC upheld Dr. Doria’s request for an inspection and ordered the CSITA to open its books to government inspectors on 12 Sept 2011.

The CSI asked for a week’s delay, and then filed a motion with the Madras High Court and received an injunction forbidding the RoC to investigate the church’s trust holdings.

In his ruling lifting the stay, Justice Rajeswaran held the CSITA was subject to the rules of the Companies Act.  The arguments offered by counsel for CSITA were of no merits,” the court held, adding that it was the “duty of the directors and other officers or the employees of the company to provide all the assistance for such inspection of the records.”

The judge agreed with the RoC that the CSITA “is a habitual defaulter in filing the statutory returns in time and also not in the habit of replying to the genuine queries raised by the first respondent regarding the complaints received against the company.”

First printed in The Church of England Newspaper.