Mumbai school trust transferred Rs 24 cr to pvt entity in 3 yrs; audit recommended

Swami Vivekanand International School and Junior College at Kandivli on July 11. File Pic/Nimesh Dave

The American Education Trust - which runs Swami Vivekanand International School and Junior College, a prominent Kandivali-based school - is under the scanner of the charity commissioner's office for transferring Rs 24.35 crore to Spring Bird Education Private Limited from 2019 to 2021.

The officer investigating the school's accounts has proposed a special audit of the books as the trust transferred massive funds to different entities without taking mandatory approvals from the commissioner's office. However, the school management has denied any wrongdoing and stated that it would contest the allegations before the charity commissioner's office.

In July, mid-day reported about the Swami Vivekanand International School and Junior College allegedly transferring R2.95 crore to S Mahendrakumar Devichand, a Mumbai-based bullion company, at a time when teachers and school staff were asked to take pay cuts during COVID-19.

Complainant's questions

In his complaint to the Economic Offence Wing (EOW) of the Mumbai Police on September 15, 2022, Darshan Soni, president of the Citizen Right Protection Committee (CRPC), had alleged the trust indulged in money laundering and demanded a thorough probe into the entire case.

Soni told mid-day, "Funds from American Education Trust have been transferred to Spring Bird Education Private Limited where Sandeep Goenka, managing trustee of American Education Trust, is one of the directors. The trust has even transferred funds to a Mumbai-based bullion company and given donations to another trust. Why would the school give funds to a jewellery firm or other trust? The entire transaction sounds fishy and needs thorough investigation to find whether there was money laundering."

The EOW accordingly shared the information with the charity commissioner's office which in turn, on December 12, 2022, appointed one of its officers to inspect the ledger and other accounts of the trust. mid-day is in possession of the report prepared by the charity commissioner's officer.

Report's findings

"Prima facie, there seems to be merit in allegations made by the complainant. Several crore funds have been transferred without following due procedure and hence special audit of the trust accounts is needed. During the scrutiny of accounts, it has been observed that the trust transferred Rs 24,30,53,295 to Spring Bird Education Private Limited from 2019 to 2021. The trust has even failed to maintain proper records (receipts/vouchers) for the same and transfer of funds was done without obtaining necessary and mandatory approvals from the charity commissioner's office," the report reads.

The report also states that the educational trust transferred funds to several other entities, including R2.95 crore to a Mumbai-based bullion company and Rs 1 crore as a donation to another trust. "The validity of Income Tax 80-G certificate of the trust that received Rs 1 crore as donation was till March 31, 2011," the report read. Following the submission of the inspection report, the assistant charity commissioner has ordered the matter under section 41B.

Other side

Goenka has denied all the charges against the trust. He told mid-day that the organisation was aware of its responsibilities and the rules. "The alleged report prepared by the charity commissioner's inspector is being challenged as it was prepared without considering vital documents and facts which are already on record. However, the matter is sub judice before the authority concerned where we are representing all the documents and facts. There was no misappropriation of funds, as alleged," he said.

Goenka further stated that out of a desire for vengeance and frustration, a former trust member, Yogesh Patel, had been making baseless allegations against the institute, "but so far he has not been able to prove any of the allegations".

"A police case was also registered by him at Borivli police station. However, after a thorough investigation into the matter, the police did not find any substance to the allegations. Hence, they filed a B-summary report (closed the case). Similarly, Patel has filed another complaint against the trust at Kandivli police station, but after investigating the complaint, the police similarly filed a closure report. We have faith in the system and are confident that justice will prevail," the trustee added.

Past case

Earlier, the founder and managing trustee of the school, Patel, had raised a red flag about the fund transfer because it had happened without a board resolution and the permission from charity commissioner's office. Since the American Education Trust is registered as a charitable trust, Patel complained to the charity commissioner about the matter. Patel had started the Swami Vivekanand School in 1998. In 2012-13, Goenka was inducted as a trustee. In 2020, the trustees started having disputes and Patel approached the charity commissioner a year later. In 2022, he even filed a police case against Goenka. However, since the police have closed the case, Patel has challenged the closure report before the court.