Muslim charity cleared by regulator over loan
A MUSLIM charity that receives taxpayer-funded grants for programs has been cleared by the charities regulator which found a loan made to a company directed by its president was in the charity’s best interests.
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A MUSLIM charity that receives millions of dollars in taxpayer funds for programs, including fighting terrorism on our streets, did not declare in its annual report that its president is the sole director and major shareholder of a company that received $1 million in association funds.
It can also be revealed the Lebanese Muslim Association charity received $4.56 million in government grants and welfare income in 2016 but only spent less than half of that on programs, including countering extremism.
The LMA, which pays no tax as a not-for-profit organisation, recorded a $3.1 million surplus in the 12 months to December 2016, with 45 per cent of its revenue from “welfare — including grants”.
Read the full Lebanese Muslim Association report
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The LMA “agreed to make an investment” to Maryum Investments for $1 million on 21 April 2016, but did not declare in the association’s 2016 financial report that LMA president Samier Dandan is the director and majority shareholder of Maryum. It says the money has since been repaid.
When directors have an interest in transactions between companies, those “related party transactions” should be declared under corporations’ law. “We expect entities to disclose information about existing related party transactions in disclosure documents,” ASIC guidelines state.
In a statement Mr Dandan denied any wrongdoing or misuse of government funds.
“There has been no misuse of government money. No government money has been invested or loaned to Maryum Investments,” he said.
Prominent criminal lawyer Adam Houda was yesterday listed on Australian Securities and Investments Commission records as a minority shareholder in Maryum and had previously been a director until 2010 for eight years. Mr Houda said yesterday ASIC records were wrong, before calling back to add that he had requested his name be removed as a shareholder from ASIC’s register, backdated for 10 years.
At the time of the LMA investment in April 2016 in Maryum, former NRL star Hazem El Masri was a minority shareholder and director. Eight months later in December 2016 he resigned and relinquished his share.
“We bought some property in a place called Macquarie Links, me, Samier Dandan and Hazem about two decades ago,” Mr Houda said. He said not since then had he been involved in any business dealings with Mr Dandan or Maryum.
“(El Masri) is the same as me, he’s got nothing to do with it either,” Mr Houda said. Mr El Masri did not reply to requests for comment.
According to the LMA’s 2016 financial report Maryum was not required to pay back any interest to the LMA on the investment, but had to return the “total of investment capital” as a minimum after 12 months.
Mr Dandan said he did not and never has made any money out of LMA investments.
“I am not and have never intended to make any money at all out of any of the transactions between the LMA and Maryum Investments,” he said.
Nor had he financially benefited from his role as president.
“Maryum is an investment vehicle owned by me, in which the LMA invests. The LMA cannot invest in banks and earn interest. The auditor of the LMA accounts knew this and did not ask or require that the LMA declares my interest in the annual reports, provided the board was aware of it,” Mr Dandan said.
He declined a request to produce board minutes showing the board knew of his ownership of the company.
The Daily Telegraph understands the invested funds went to a third party company which was contracted to pay a $60,000 annual fee to the LMA in exchange for the $1 million.
Mr Dandan in his statement did not explain what Maryum did with the funds, which the LMA says has been paid back.
The LMA’s lawyer said no unspent government grant money was used to fund the $1 million investment.
“Any suggestions of this is completely false,” said Daniel Wakim of Longton Legal.
He said Mr Dandan’s interest in Maryum was “declared to the LMA’s board members”, adding the money had been repaid to the LMA. “The investment was a financial investment for the benefit of the LMA,” Mr Wakim said.
A spokeswoman for Australian Charities and Not-for-profits Commission said due to “secrecy provisions … we are not able to comment on the specific circumstances of a charity”. “The standards require charities to remain charitable, operate lawfully, and be run in an accountable and responsible way,” the spokeswoman said.
Mr Dandan is an influential member of the Muslim community who made a strident speech at Lakemba Mosque two years ago damning “divisive and toxic policies” and “hate preachers”.
He is a moderate who has detractors among the more conservative Islamic members of the community. The founder of IT services company ManageNET, he is director of several companies associated with health and ageing services, areas the LMA focuses on. Mr Dandan is also chairman of Crescent Wealth Funds Management, which provides “Shariah compliant investments” and superannuation to the Muslim Community.
The LMA receives funding from state and federal government departments annually, including a $2.75 million federal grant from the department of immigration under the Diversity and Social Cohesion program in 2013/14.
The 18 month program aimed to develop “community capacity-building skills” of “community groups under significant pressure due to their cultural, religious or racial diversity”, according to the department.
Editor’s note
In April 2019, following an investigation, the Australian Not-for-profits and Charities Commission concluded that Mr Dandan did not personally benefit from the charity’s $1million investment in Maryum Investments.
The Commission also concluded that the transaction was in the best interests of the charity, and that Mr Dandan acted appropriately, and properly declared his conflict of interest.