Million Pound Missing from East London Mosque: Authorities Remain Silent

Janomot Report: The East London Mosque Trust, one of Europe's most prominent Islamic institutions led by British Bangladeshis, has lost one million pound by investing mosque funds into a business. The mosque authorities have not provided a clear explanation for this significant loss, raising questions and concerns within the community.

The incident involved the investment in Matz Medical Limited, a company that went into administration.

In April 2022, the mosque fund invested £1m in Matz Medical Ltd., and within just seven months, by November of the same year, the company went into administration.

Despite specific questions from Weekly Janomot, the mosque authorities have not provided clear answers, avoiding the questions by stating that "the matter is under legal process."

This avoidance has led to questions about the mosque management committee's responsibility to the devout donors who support this big mosque.

The East London Mosque was established in 1910 by the Muslim community in Britain. It has grown to its current status primarily through the financial support of British Bangladeshis over a half a century.

The East London Mosque Trust manages this vast institution, which is registered with the Charity Commission and has 82 members. These members elect 12 trustees who carry out the primary responsibilities of managing the mosque. The East London Mosque raises 4 to 5 million pounds annually through regular Ramadan appeals and various activities. This mosque is liked by the wider community it serves.

However, it remains a mystery why a mosque, which appeals large amounts of money during Ramadan under the guise of "Qard Hasanah" chose to invest mosque funds in this manner.

JANOMOT Newsweekly sought answers to many questions (see questions below) raised by the public about the wisdom and involvement behind this investment decision, primarily since the mosque collects significant amounts as Qard Hasanah annually without repaying these loans.

After several weeks of attempts (including email exchanges), the CEO of East London Mosque Trust, Mr Junaid Ahmed, responded briefly, stating, "We are unable to comment further to avoid prejudicing the ongoing legal process". (Full response below) 

Similarly, in a telephone conversation with Janomot, former Chairman Mr Ayub Khan responded. However, neither Mr Khan nor the mosque authorities had provided a clear statement on what kind of legal action is being taken, against whom, when this alleged "case" might be resolved, or if the lost funds can be recovered.

One million pound was invested following a board decision during Mr Ayub Khan's tenure as chairman. At that time, Mr. Dilwar Khan was the finance director. He also told Janomot, "The matter is under legal process, so I cannot say much."

First Admission of Lost Funds

During Ramadan, the East London Mosque hosts iftar and press briefings with local Bengali media annually. The goal is simple: to highlight their activities from the past year and launch a fundraising campaign. The authorities introduce new projects annually and present them to the community through press conferences. Funds have been raised through appealing campaigns for various development projects, such as purchasing premises adjacent to the mosque, extensions, Waqf funds, and dome repairs. There is also an annual appeal for Qard Hasanah (benevolent loans).

However, at this year's press conference, the leaders of the ELM Trust muttered to answer a particular question. They were utterly unprepared. A journalist asked about the longstanding rumors in the community regarding the mosque's loss of one million pounds. Other questions also arose about the dome fund that had been collected without any work starting, why world-renowned hafises from Bangladesh were not brought to lead Tarawee prayers, establish a library, and account for the mosque's income and expenses.

In response to the question about the lost million pounds, ELM Trust Chairman Dr. Abdul Hai Morshed, though somewhat unprepared, eventually admitted that the mosque had suffered a loss of one million pound from the investment. He described the issue as "complex," stating, "It's problematic if we say too much and also if we say too little." He added that they are trying to recover from this loss but did not explain how.

Meanwhile, some sources suggest that some trustees have partially compensated the Trust for the loss or promised to do so. However, former Chairman Ayub Khan told Janomot that "this is not true." There is a rumor that the Trust has recovered up to 300,000 pounds in this manner.

A source associated with the mosque mentioned that another company acted as a guarantor for the investment, and the legal proceedings are primarily aimed at recovering money from this guarantor. Some believe that a "property" was held as a guarantee. Due to the mosque authorities' "mysterious" lack of clarity, various opinions, speculations, rumours, and doubts are spreading within the community.

The East London Mosque Trust's financial statement filed with Companies House mentions that ""The full investment amount of ELMT, is deemed irrecoverable." This raises the question: if it is deemed "unlikely to be recovered," why is it repeatedly stated that "no questions can be answered due to ongoing legal proceedings"?

Significant Fundraising During Ramadan

Ramadan is the busiest month for all mosques, religious institutions, and charity organisations. During this month, Muslims give various types of charity, including Zakat and Fitrah.

For the East London Mosque Trust, it is also an important month. They raise funds through various appeals. This Ramadan, through different appeals, the East London Mosque raised £444,191 in cash and an additional £362,182 as Qard Hasanah and pledges. This totals more than £800,000, which was collected from the community during Ramadan. Besides internal appeals in the mosque, extensive campaigns were run on television and in several Bengali weekly newspapers. In the past, this institution has also raised over a million pounds in Ramadan alone.

Notably, the East London Mosque, a prestigious and esteemed institution among the European British-Bangladeshi community, provided 1,000 iftar meals daily for worshippers this Ramadan. Additionally, with the help of the mosque's charity partners, 12,000 iftar meals were provided in Sudan, Somalia, Malawi, Bangladesh, Yemen, and Palestine. During Ramadan, 41 external charity organisations raised a total of £450,000 at the mosque during Zuhr and Tarawih prayers. The East London Mosque also collected £96,528 as Zakat al-Fitr this year.

Financial Statement of East London Mosque Trust Regarding Matz Medical

The financial statement of the ELM Trust, submitted to Companies House, states: In the financial year 2022-2023, East London Mosque Trust invested one million pounds with a company named Matts Medical Limited.

A company called Olive Capital Group facilitated this investment for ELM. The purpose of the investment was to finance the purchase orders of medical supplies for the NHS.

In September 2022, a Freedom of Information request submitted to the NHS Supply Chain Coordination Lead by another investor revealed that this investor had entered into a contract with Matts Medical Limited, where false purchase order numbers may have been provided. It was confirmed that Matts Medical Limited was not a listed supplier under the NHS Supply Chain Framework in September 2022. Following actions by another creditor, Matts Medical Limited went into administration in November 2022.

The accounts further state that the full amount of ELM Trust's investment is considered 'unlikely to be recovered'. The Trust is attempting to recover some of the losses by assessing personal guarantees that were provided at the time of the investment.

During the financial year, the Trust invested £1m with a company called Matz Medical Limited. The investment was introduced by a company called Olive Capital Group. The purpose of the investment was to fund medical instrument purchase orders for the NHS.

In September 2022, a freedom of information request submitted to NHS Supply Chain Coordination Ltd, by another investor revealed that the said investor had entered into agreements with Matz Medical Limited, where false purchase order numbers may have been provided. Matz Medical Limited was confirmed as not being a listed supplier under the NHS Supply Chain Framework as of September 2022. Matz Medical Limited entered into administration in November 2022, following action by another creditor.

The full investment amount of ELMT is deemed irrecoverable.

The Trust is attempting to recover some of the loss by assessing personal guarantees provided at the time the investment was entered.

Charges on Matz Medical by Two Companies Totaling 4 Million Pounds

Documents from the liquidator reveal that Matz Medical's warehouse contains 1500 pallets of goods, including medical equipment, PPE, hand sanitiser bottles, etc. Due to the lack of cooperation from the directors, it is unclear whether all the stock is the same or if they have proper certification and valid dates. It was also found that Barclays Bank placed a charge on the company's assets amounting to £877,549 on December 14, 2020. Another investment company placed a charge of £3,030,181 on Matz Medical Limited's assets, with the paperwork delivered to Matz Medical on August 18, 2021. Notably, the ELM Trust invested one million pounds in April 2022.

The decision to invest in Matz Medical Limited naturally raises many questions. Its financial health, unusual growth, and operational flaws are evident in the financial statements filed with Companies House. This is why Companies House issued several notices to this company. The significant question now is how a strong board like the East London Mosque Trust Board approved an investment in 'Matz Medical'. Who will answer why the ELM Trust invested in such a company? The CEO has mentioned that they sometimes make Shariah-compliant investments.

Why Invest in Medical Supplies?

Why did the East London Mosque Trust agree to invest in such a company? Why did they invest in a company with questionable purchase orders to procure NHS equipment? This has now raised questions.

During and after COVID-19, investments in the UK's health sector, particularly in PPE supply, were the most controversial news. Almost all mainstream media were vocal about widespread corruption in this sector across the country. The government faced severe criticism for wasting billions of pounds. This led to the resignation of the then-Health Secretary, Matt Hancock, and a member of the House of Lords had to step down.

The moral question remains: why did East London Mosque Trust officials choose to invest in a sector infamous for 'wasteful spending' of NHS funds during one of the biggest financial scandals in NHS history?

More Comments from Mosque Trust Chairman Dr. Abdul Hye Morshed

On Monday, March 18, East London Mosque authorities organised a press briefing and Iftar gathering for local Bengali media at the LMC's Maryam Centre.

In response to a journalist's question about the 'lost million pounds' investment and the annual accounts, Trust Chairman Dr Abdul Hye Morshed said, "The question about annual accounts has already been published. We submit our income and expenditure details to Companies House every year. Perhaps it would be better to provide you with a copy when we invite you."

In response to the journalist's question about the investment, the ELM Trust Chairman said, "The investment you mentioned has also been reported to Companies House. What happened and how it happened is all stated there."

He said, "There are many complex issues here. It's not possible to explain everything straightforwardly. The mosque's income cannot always be kept in the bank. Sometimes, a lot of money accumulates with us. We couldn't carry out many planned projects during the pandemic because everything was closed. At that time, we had a lot of money accumulated. Our committee decided how to use that money. The investment was made, and the loss of investment is not a rumour; it's true, and there were some problems. But it's so complex that you can check it at Companies House."

Referring to "legal matters," Abdul Hye Morshed said, "It's problematic whether we say too much or too little."

Another journalist asked a follow-up question about the investment process and why the risk was taken to invest in a company that received four notices. In response, Abdul Hye Morshed said, "We follow an investment policy provided by the Charity Commission. There are no personal opinions involved here. Everyone can make mistakes. If we make mistakes, let us know, and we will try to correct them."

East London Mosque Trust's Response to Janomot's Questions

In light of various questions and concerns within the community regarding the loss of a million pounds from the East London Mosque Trust, JANOMOT sent an email with a set of questions to CEO Junaid Ahmed.

At an Iftar event on March 18 with Bengali media, detailed discussions were held about the operations of the East London Mosque. It is recognized that the East London Mosque is a proud religious institution of the British Bangladeshi community. This historic religious institution, over a hundred years old, has been working in various ways for the community's welfare. It has become one of the most prominent Islamic institutions in Europe, thanks to the love and cooperation of the Bangladeshi community. For this reason, the community is always compassionate about this institution. Recently, many whispers have been about a £1m investment of the mosque to a company, which has gradually become the 'talk of the town.' Finally, during a press conference during Ramadan, the mosque authorities admitted that the rumors of the mosque losing the investment were true. This has raised many questions and concerns within the Muslim community, especially the Bengali community in East London."

These were the questions Janomot asked.

1.⁠    ⁠What is the amount of money the mosque fund lost?

2.⁠ ⁠ When and which institution was this money invested, and in what consideration?

3.⁠ ⁠ When did the East London mosque authorities know they lost invested money?

4.⁠ ⁠ It said the loss of funds was declared in the company house accounts. Do you think donors have the right to know? If so, why did the mosque not issue any statement?

5.⁠    ⁠Why have some of the committee members been removed from responsibility? What was their involvement in the mosque's money loss? Are they currently involved in the mosque's management?

6.⁠    ⁠Was the decision to invest the mosque fund in the business following the decision of the board of directors meeting?

7.⁠ ⁠ What steps have been taken to recover this money since discovering the loss?

8.⁠ ⁠ The community concern is why a mosque seeking financial support claims to repay millions of pounds in debt each year when it invests in the business instead of paying off the loan. What is the religious explanation for investing money in a business while leaving the mosque in debt?

9.⁠ ⁠ The East London Mosque runs numerous services and activities, many unique and universally appreciated. How many activities are currently being run, and how much is the departmental budget for these activities?

10.⁠ ⁠Is the money donated to the mosque invested in any other sector? Has mosque money been invested or lent to purchase personal property of anyone involved in the management?

11.⁠ ⁠ A detailed description of the mosque's sources of income and how much income it receives from which sources.

After several email exchanges, CEO Junaid Ahmed sent an 'official' response on May 3.

Here it is:

"East London Mosque Trust (ELMT) has a long-standing practice of making Shariah-compliant investments to support its charitable activities. These investments have successfully generated income, which is being used for various services and mosque development. In some cases, the returns from investments are reinvested for additional income for ELMT.

"In April 2022, when the company (where the investment was made) went into administration and their assets were frozen, one investment did not materialize for ELMT. Consequently, specialist lawyers have been appointed to recover the funds.

"Due to our stable financial position, we will be able to continue our services and fulfill our development commitments, Insha'Allah.

"We cannot comment further to avoid prejudice due to the ongoing legal process.

"We are deeply grateful for the continued support of our worshippers and well-wishers."