Court orders Indian church trustees be removed for fraud

National Company Law Tribunal finds a prima facie case of systemic fraud and misconduct exists in the management of the Church of South India’s properties

An Indian administrative court has suspended the officers and directors of the Church of South India Trust Association after finding a prima facie case of fraud existed in the management of the church’s assets. On 21 Nov 2016 the National Company Law Tribunal meeting in Chennai appointed retired Madras High Court Judge K. Sampath to serve as interim chairman of the CSITA.

The CSI communications department on 28 Nov 2016 reported the Madras High Court, however, had issued an injunction blocking the implementation of the order, pending a full hearing.  While individual bishops have been investigated by police for fraud, and some jailed for stealing from the church, last month’s ruling is the first major decision addressing what critics charge is systemic corruption within the church of 23 dioceses covering the southern half of India.

In October the Ministry of Corporate Affairs directed its Serious Fraud Investigation Office to investigate charges that church officials had diverted rents received from church lands, sold church properties at below market prices in collusion with buyers, who then offered kickbacks to the officials, and engaged in widespread fraud and corruption the management of the church’s schools, hospitals and other institutions.

In his initial order removing the CSITA’s trustees, Justice Mohammad Sharief Tariq of the National Company Law Tribunal found that a prima facie case for misconduct had been made by the petitioners — a group of lay activists. “Since the company petition is held maintainable in the given circumstances, there is an urgent need to regulate the affairs of the [Church of South India Trust Association]. Thus I proceed to remove all the directors and managing committee including office bearers…”

“The erstwhile management committee is directed to hand over all the documents and books of accounts and other records of the [CSITA] to the Registry of this bench is a sealed cover within a week from the date of pronouncement of this order…”

The moderator of the CSI, the Most Rev. Govada Dyvasirvadam told the Economic Times the court’s order would disrupt the inner workings of the CSI. He said “We respect the law of the land. But we are a democratically elected body. We will contest this order.”

The Madras High Court, which granted the injunction blocking implementation of the administrative court’s order, last month handed down a second injunction, this time blocking the CSI’s Diocese of Coimbatore from holding elections to the diocesan council at the 14-16 Nov 2016 meeting of the diocesan synod. Justice N. Kirubakaran of the Madras High Court noted the diocese was currently under investigation by the Serious Fraud Investigation Office for the malfeasance of its officers — including the former Bishop in Coimbatore, Manickam Dorai, who was removed from office by the CSI’s synod for fraud.  A petition filed by lay members of the diocese claimed that while their former bishop had been removed by the church for corruption, his cronies still exercised power in the diocese. Without a thorough housecleaning, they charged, the corruption would not end in the diocese.


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